The U.S. Securities and Exchange Commission will meet publicly on Friday to consider whether to propose a dedicated offering framework for certain investment contracts involving crypto assets, potentially opening a formal route for token projects to raise development capital under rules designed for the sector.
The SEC disclosed the agenda item on Monday but did not release draft text or describe the scope of any potential exemption. A commission vote on Friday would authorize staff to publish a proposal for public comment; it would not establish binding rules or immediately change how token offerings are regulated.
TD Cowen’s Washington Research Group said the measure could begin with a safe harbor for early-stage token sales. In a note attributed to Managing Director Jaret Seiberg, the firm described the meeting as a possible opening move in a sequence of SEC rulemakings after the Senate did not advance the Clarity Act, a crypto market-structure bill, before its August recess.
A potential route from fundraising to decentralization
Seiberg said the SEC could build a framework around projects whose underlying crypto assets may not themselves be securities, even if the way those assets are initially sold qualifies as an investment contract under federal securities law.
Under the approach outlined by Seiberg, a project sponsor could raise money through an investment contract while building a network and distributing tokens. The project could later move outside SEC oversight if the network no longer relies on the sponsor’s managerial or entrepreneurial efforts.
That model addresses a recurring legal problem for token issuers. A token launch can involve a fundraising arrangement that draws securities-law scrutiny, while the token’s eventual use on a functioning network may look materially different from the original sale. Existing law has left issuers, developers and token holders to assess that transition through enforcement cases, court rulings and individual legal advice rather than through a purpose-built SEC process.
A safe harbor could give qualifying projects defined conditions for selling tokens during early network development without treating the tokens themselves as securities. The precise legal structure would matter greatly: a proposal could protect only a particular offering, impose extensive disclosure obligations, limit eligible issuers, or require projects to meet operational milestones before relying on the exemption.
The SEC has not said whether any of those elements will appear in Friday’s proposal.
Atkins has previously discussed tailored crypto rules
Seiberg said SEC Chair Paul Atkins previewed the concept twice in March. He pointed to Atkins’ discussion of a regulatory path for issuers whose crypto assets are not securities but are initially offered through investment contracts.
The analysis also cited a 68-page legal interpretation concerning the application of securities laws to crypto assets that was issued alongside the Commodity Futures Trading Commission, according to TD Cowen. Such guidance could provide the legal foundation for a proposal intended to distinguish the fundraising contract from the asset delivered or used after a network develops.
The distinction has implications beyond token issuers. It could influence how developers structure early fundraising, how custodians assess assets offered under an exemption, and how trading venues evaluate whether an asset remains within the SEC’s jurisdiction.
A rulemaking could also provide a formal test for determining when a token has shifted to commodity status and is no longer subject to SEC rules, Seiberg said. The Commodity Futures Trading Commission generally oversees commodities markets and derivatives, while the SEC regulates securities. Defining the boundary between their roles has become one of the central unresolved questions in U.S. crypto policy.
Disclosure could be central to any safe harbor
TD Cowen expects that projects relying on a tailored exemption could be required to publish a whitepaper covering token design, development plans, token economics and governance. Seiberg also said disclosures could address developer compensation, project risks and custody arrangements.
Those requirements would place the proposed regime closer to a regulated capital-raising process than an unrestricted token-sale exemption. A whitepaper requirement, if included, could give prospective token buyers more standardized information about supply schedules, governance rights, sponsor incentives and technical dependencies—areas that vary widely across crypto projects today.
Disclosure alone would not settle whether a particular project qualifies. The SEC would need to define such terms as network development, sponsor control and independence from managerial efforts. Those definitions could determine whether the framework is usable for projects with foundations, core development companies, treasury-management entities or concentrated token holdings.
The agency’s eventual proposal may also show whether it treats decentralization as a single threshold or as one factor among several. A narrow threshold could limit the number of projects able to exit SEC oversight. A more flexible approach could give sponsors greater room to demonstrate that a network operates independently, though it could also invite disputes over how independence is measured.
Friday’s vote would begin, not end, the rulemaking process
If SEC commissioners approve publication, the agency would be expected to release proposed rules and supporting materials shortly after the meeting, Seiberg said. The public would then be able to submit comments before the commission considers a final rule.
That process gives crypto companies, consumer advocates, lawyers and other market participants an opportunity to challenge definitions, disclosure burdens and eligibility standards before the SEC adopts a final framework. The commission could revise the proposal substantially in response to comments, or commissioners could ultimately decline to finalize it.
Friday’s meeting therefore offers the clearest indication yet of whether the SEC intends to replace part of its case-by-case crypto enforcement approach with written offering rules. The initial proposal, rather than the agenda notice alone, will determine whether the agency has created a practical compliance route for early-stage token networks or a narrow exemption that few projects can use.
As U.S. rules evolve, explore how traditional finance meets crypto in our guide to TradFi and crypto market structure today.
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