Blockchain Association Urges SEC to Double Crypto Fundraising Limits
On October 20, 2026, the Blockchain Association submitted an official comment letter urging the Securities and Exchange Commission to double capital fundraising caps within its proposed Regulation Crypto Assets framework.
The trade group argued that the agency’s current limits restrict capital formation for early-stage digital asset developers.
Key Takeaways
- Capital Thresholds: The association formally requested that the SEC increase the proposed Startup Exemption cap from $5 million to $10 million.
- Fundraising Limits: The group urged the Commission to lift the broader fundraising offering ceiling from $75 million to $150 million.
- Airdrop Exclusions: The association recommends excluding airdrops and network rewards from the proposed Startup Exemption’s fundraising limit.
- Legacy Provisions: The advocacy body requested retroactive safe harbors to protect tokens that are already actively trading on secondary markets.
Demanding Higher Capital Thresholds for Startups
The advocacy group focused its push on expanding the financial parameters of the draft framework, known as File No. S7-2026-27, which was introduced on August 18, 2026. Under the existing draft written by the regulator, early-stage projects face a strict $5 million maximum cap over a four-year window.
In the official Blockchain Association comment letter, leadership asked the agency to raise that limit to $10 million.
This specific adjustment represents an exact $5 million increase, effectively doubling the financial runway allowed for emerging decentralized networks.
For larger scale capital raises, the trade association targeted the broader fundraising exemption. The regulatory body initially proposed a limit of $75 million per 12-month period for these expansive offerings.
The industry response calls for a lift to $150 million, which introduces a matching $75 million upward adjustment to ensure that American firms can scale competitively without triggering heavy reporting burdens.
Safe Harbors, On-Chain Reporting, and State Preemption
Beyond the core financial thresholds, the industry feedback outlines necessary structural pathways for tokens already active on secondary public platforms. The association requested a functional safe harbor mechanism allowing qualified third parties or trading exchanges to file compliance documentation on behalf of legacy projects.
The association also urged the SEC to recognize that publicly available on-chain information can provide investors with some of the transparency traditionally supplied by audited financial statements, and to account for that information when designing disclosure requirements.
The industry group also requested robust federal preemption over state registration rules, commonly referred to as Blue Sky laws. The letter notes that a lack of federal preemption would force startups into a fractured regulatory environment, complicating compliance across dozens of local jurisdictions.
The comments come after the SEC approved a separate five-year, conditional Innovation Exemption on September 17 for qualifying tokenized-securities trading venues. That relief concerns trading infrastructure and is distinct from the proposed fundraising exemptions and conditional investment-contract safe harbor under Regulation Crypto Assets.
Sources & Attribution: Reporting and figures in this article are compiled from official regulatory filings issued by the Securities and Exchange Commission and the formal public response published by the Blockchain Association.
Now that the regulatory revisions are applied, let me know if you would like me to unpack:
The specific objective criteria requested to determine when developer efforts have officially ended.
How the good-faith liability protections would shield participating broker-dealers.
The explicit process for filing legacy token disclosures without an admission of security status.
📅 What to Watch Next
The Commission may revise the proposed regulations after considering the submitted comments. Any final rule would require further SEC action before taking effect.
Key Story Metrics & Analytical Comparison
| Proposed Exemption Category | Baseline SEC Cap | Blockchain Association Counterproposal | Quantitative Increase | Source |
|---|---|---|---|---|
| Startup Exemption (4-Year) | $5,000,000 | $10,000,000 | $5,000,000 | SEC File No. S7-2026-27 / Blockchain Association |
| Broad Fundraising (12-Month) | $75,000,000 | $150,000,000 | $75,000,000 | SEC File No. S7-2026-27 / Blockchain Association |
Frequently Asked Questions
What changes did the Blockchain Association request for crypto airdrops?
The association recommended that community airdrops and network rewards not count against the Startup Exemption’s fundraising ceiling. It also asked the SEC to incorporate its treatment of airdrops into the final regulation.
How does the proposal handle tokens that are already trading?
The requested mechanism would provide an avenue for filings concerning previously issued tokens, without treating those filings as admissions that the tokens were securities.
Primary Sources & Documentation
Sources & Attribution: Reporting and figures in this article are compiled from official regulatory filings issued by the Securities and Exchange Commission and the formal public response published by the Blockchain Association.
