A Rulebook for Token Issuance

The SEC’s latest proposal brings fundraising exemptions, disclosure requirements and a safe harbor into the crypto compliance framework

Crypto regulation in the United States has spent years developing through enforcement actions, court decisions, agency interpretations and repeated attempts at legislation.

The latest SEC proposal takes a more structured route.

Instead of forcing every token project into the same securities framework, the Commission is proposing tailored pathways for early-stage development, larger fundraising rounds and certain crypto assets that may eventually fall outside the definition of an investment contract.

The proposal is still open to public comment and may change substantially before adoption. Its significance lies in the architecture it introduces.

Crypto compliance could become more closely linked to the stage of a project, the amount of capital raised, the disclosures provided to investors and the degree to which an asset remains connected to the original issuer or development team.

That would give market participants something they have struggled to obtain for years: a more predictable regulatory path from launch to maturity.

A different approach to early-stage projects

Traditional securities regulation was built around companies issuing stocks, bonds and other established financial instruments.

Token projects often develop differently.

A network may begin with a relatively small development team, raise capital to fund technology and distribution, issue a token and then gradually expand participation across users, validators, developers and independent market participants.

The regulatory position can change as that network develops.

At an early stage, investors may rely heavily on the development team to create value. Later, the same token may function primarily as an asset used inside a broader network.

The SEC proposal attempts to recognise that lifecycle.

Its startup exemption would allow qualifying projects to raise limited amounts of capital over a defined period while providing tailored disclosures rather than immediately entering the full public-securities registration regime.

For legitimate early-stage projects, that could reduce the cost of compliance without eliminating investor protection.

Disclosure remains central

Regulatory flexibility does not remove disclosure obligations.

Under the proposed framework, issuers using the exemptions would still need to provide information about the project and the offering.

For larger fundraising rounds, financial statements and ongoing reporting would also be required.

This reflects a useful compliance principle.

Crypto assets may require different disclosures from conventional securities, but investors still need reliable information to understand what they are buying.

Relevant information may include:

• the role of the issuer or development team;
• token supply and distribution;
• governance arrangements;
• use of proceeds;
• network functionality;
• material conflicts of interest;
• custody and technology risks;
• financial condition of the issuer;
• rights attached to the asset;
• conditions under which those rights may change.

The format can be adapted to the technology.

The obligation to provide meaningful information remains.

Safe harbor creates a lifecycle question

The proposed safe harbor may become the most consequential element.

It would allow certain crypto assets to fall outside the investment-contract framework when specified conditions are met.

This creates a regulatory lifecycle rather than assuming that the legal status of every asset remains fixed permanently.

That approach reflects how some digital networks actually develop.

A token may initially be distributed in circumstances where buyers rely significantly on a central development team. Over time, control may become more distributed, the network may become functional and the original fundraising relationship may become less relevant to secondary-market users.

The difficulty lies in defining that transition clearly enough for firms to operate around it.

Market makers, exchanges, custodians, payment providers and other intermediaries need to know when an asset changes status.

Ambiguous transitions create operational risk because those firms may not have access to all the issuer-side information required to determine whether a legal threshold has been crossed.

The usefulness of the safe harbor will therefore depend heavily on objective criteria and reliable public disclosures.

Compliance needs predictable trigger points

Financial regulation works best when firms understand what event creates an obligation.

A transaction above a particular threshold may require reporting. A change in ownership may require approval. A new customer relationship may trigger due diligence.

Crypto regulation has often lacked comparable certainty.

Firms have had to interpret broad legal principles while dealing with assets whose structure changes over time.

A workable token framework needs clear trigger points.

Those may relate to fundraising size, issuer involvement, governance concentration, network functionality, investor rights or the maturity of the underlying protocol.

The exact criteria remain subject to debate.

The compliance objective should be predictable enough that firms can design procedures around them before a transaction occurs.

Regulatory clarity is operationally useful only when it can be converted into controls.

A lighter framework can still require stronger evidence

Exemptions are sometimes interpreted as reduced compliance.

In practice, tailored exemptions often create a different form of compliance.

A firm relying on an exemption needs to prove that it qualifies for it.

That may require documentation around offering size, investor communications, project development, token distribution and the conditions of the safe harbor.

If the regulatory status of an asset changes over time, the business will also need evidence supporting that assessment.

This makes recordkeeping especially important.

A project should be able to show which exemption it relied upon, what disclosures were available at the time, how capital was used and what changes occurred as the network developed.

Intermediaries may need their own documented analysis before listing, trading, custodying or distributing the asset.

A simpler registration pathway does not make documentation optional.

It may make the quality of documentation more important.

The compliance burden shifts across the ecosystem

Token regulation affects more than issuers.

Exchanges need to determine which assets they can list and under which regulatory regime.

Broker-dealers and market makers need to understand whether trading activity triggers securities obligations.

Custodians need clarity around asset classification, client protections and operational controls.

Payment providers need to distinguish between assets used as financial instruments and those functioning primarily as payment or network assets.

Banks and institutional counterparties need sufficient information to assess legal, financial-crime and reputational risk.

A clearer issuer framework can make these decisions easier because more reliable information becomes available upstream.

But regulatory certainty for the issuer does not automatically solve every downstream compliance question.

Different activities may still trigger separate securities, commodities, AML, sanctions, custody, consumer-protection and state-level requirements.

The operating environment remains multi-layered.

Federal rules and legislative durability

The timing of the SEC proposal matters.

Congress has been working on broader legislation that would define regulatory responsibilities across the crypto market and clarify the respective roles of the SEC and CFTC.

That legislative process has stalled.

Agency rulemaking can address parts of the problem more quickly, but it has different legal characteristics.

A federal statute passed by Congress creates a stronger and more durable foundation. Agency rules operate within powers already delegated under existing law and can be challenged in court, amended or reversed by future administrations.

For businesses planning multi-year investments, that distinction matters.

A rule may provide enough clarity to launch a product today while still leaving uncertainty about the regulatory environment several years later.

Compliance teams therefore need to distinguish between current permission and long-term legal durability.

Both matter.

The contrast with Europe

The United States and European Union are increasingly arriving at crypto regulation through different institutional routes.

Europe built MiCA as a dedicated legislative regime, supported by technical standards and national supervision.

The U.S. system is developing through a combination of existing securities law, agency interpretation, SEC and CFTC rulemaking, court decisions and unfinished congressional legislation.

Neither model is frictionless.

A comprehensive legislative framework can be slower and more prescriptive. Agency-led rulemaking can move faster but create greater uncertainty about scope and permanence.

For international businesses, this means regulatory fragmentation will continue even as individual jurisdictions become clearer.

A token project may be treated one way in the United States and differently in the EU, UK or another market.

Global compliance therefore requires jurisdiction-by-jurisdiction analysis rather than assuming that one regulatory classification travels automatically across borders.

Investor protection becomes more specific

One positive development in the SEC proposal is the emphasis on disclosures adapted to crypto assets.

Traditional prospectus requirements can include information that is highly relevant to operating companies but less useful for decentralised or network-based projects.

Crypto investors may need different information.

Token distribution can matter more than conventional share ownership. Governance concentration can matter more than a corporate board structure. Smart-contract risks, protocol dependencies and validator incentives may matter more than physical assets or traditional supply chains.

A tailored regime can improve investor protection if it requires information that actually explains the risk.

The danger is using flexibility to reduce disclosure quality.

A shorter document is only better when it gives investors clearer information.

Regulatory design should optimise for relevance rather than volume.

What firms should prepare for

The proposal is not final, but firms that may use these pathways can begin thinking about the operational implications.

Projects considering token issuance should maintain clear records of fundraising, token allocation, governance, project milestones and the role of the development team.

Compliance and legal teams should map how an asset’s regulatory status could evolve over time and identify which changes would require a reassessment.

Trading and custody platforms should review what issuer information they would need before relying on a safe-harbor analysis.

Financial-crime controls remain separate and should continue regardless of securities classification.

Businesses should also avoid building a product solely around the assumption that the current proposal will be adopted unchanged.

The public-comment process exists precisely because material elements may still move.

Preparation should focus on the direction of travel: better disclosure, clearer exemptions, documented eligibility and more explicit lifecycle rules.

MetaNord’s view

At MetaNord, we see the SEC proposal as a useful step toward a more operational form of crypto regulation.

The industry has spent too much time interpreting regulatory boundaries after products were already launched.

Clearer issuance pathways allow compliance to become part of product design from the beginning.

That means understanding which exemption applies, maintaining the right disclosures, tracking the project’s development and ensuring that downstream partners can understand the legal status of the asset they are handling.

The remaining challenge is durability.

A market can operate more confidently when the rulebook is clear. It can invest more confidently when that rulebook is expected to remain stable.

The SEC proposal improves the first part.

The legislative process will still matter for the second.