ICO Market Demand Weakens, US SEC Proposes to Reopen Public Token Sales to Investors

Odaily News The U.S. Securities and Exchange Commission (SEC) published a proposed rule this month, aiming to reopen public token sales to American investors, allowing crypto startups to raise up to $5 million, and larger projects up to $75 million annually, without completing the full SEC registration process. The new framework would require issuers to disclose information and may incur significant compliance costs; the rules for secondary market trading after token issuance remain complex. The proposal also suggests that investment contracts attached to tokens could terminate once the issuer completes or permanently ceases the management work promised to investors, rather than perpetually existing alongside the token. Currently, speculative capital is more concentrated in Bitcoin and a few major altcoins, perpetual contracts, prediction markets, and AI-related stocks. The number of token financings involving crypto venture capital has noticeably declined, with some major VC firms expanding their investment scope to AI, robotics, and other frontier technologies. During its peak in January 2018, ICOs raised approximately $3 billion in a single month. Tom Schmidt, general partner at Dragonfly, stated that this proposal is better than having no proposal at all, but the more pressing issue is the regulatory matters that the CLARITY Act, currently stalled in Congress, was originally intended to address, rather than fundraising. GSR research analyst Carlos Guzman noted that ICOs in 2026 are different from those in 2018, and the era of attracting capital with just a whitepaper and vision has come to an end.