Two weeks ago I wrote that the SEC's Innovation Exemption was a Wall Street gift. That tokenizing your café in Canggu or your private cap table was a 24-to-36-month wait. That the gate had been open offshore for years and Wall Street had just walked through it.

That was the half of the story I had. Last week Chairman Atkins sat down with Perianne Boring at the Bitcoin Conference in Las Vegas and put the other half on the record. There is a second instrument coming alongside the Innovation Exemption. It is called Reg Crypto. And it is the part founders should actually care about.

I want to update what I told you. The Innovation Exemption is still a Wall Street on-ramp. But Reg Crypto is something different, and I did not give it enough weight. If it lands the way Atkins is describing, it is the first US-onshore fundraising framework for token sales since the SEC effectively shut down ICOs in 2017.

That is a big deal. Let me walk through what changed.

There are three moving pieces. Most coverage is collapsing them into one. They are not the same thing.

One. The joint SEC/CFTC token taxonomy — already issued earlier in 2026. This is the foundation. It puts four buckets of digital assets outside the securities umbrella: digital commodities, digital tools, digital collectibles, and payment stablecoins. Only tokenized traditional securities — stocks, bonds, fund shares — stay fully under securities law. Atkins was explicit in the Vegas interview that this list is principles-based, not closed. If your token meets the qualifications, it can be a digital commodity even if it is not on the published list.

Two. The Innovation Exemption — coming, in Atkins's words, "in the next few weeks." This is what I covered two weeks ago. It is the rule that lets registered securities — Treasuries, public equities, registered debt — be reissued on-chain under a 12-to-36-month grace window. BlackRock, Franklin Templeton, Circle, the big asset managers. Not the founder lane.

Three. Reg Crypto — also coming in the next few weeks, under White House OIRA review right now. This is the one I underweighted. It is a two-tier safe harbor for raising capital through token sales onshore, in the United States, without going through full S-1 registration.

The two tiers, as currently described:

A Fundraising Exemption that lets more established projects raise up to seventy-five million dollars in any twelve-month window, with disclosure obligations closer to a Reg A+ offering.

For founders who do not have eight figures of compliance budget, this is the framework that did not exist before.

The legal logic underneath this matters more than the dollar figures.

The 1946 Supreme Court decision in SEC v. Howey is the case the agency has used for eighty years to decide whether something is a security. Mr. Howey had an orange grove in Florida. He sold investors little slices of it plus a contract to manage it. The Court said the investment contract — the surrounding promises — made the deal a security. Not the orange itself.

Atkins's reinterpretation, which he laid out clearly in the interview, is that the same logic applies to tokens. The token is not the security. The ecosystem of promises around the token is the security. And the test can flip in both directions — a token that started as a security can stop being one once the promises around it are fulfilled and the network is sufficiently autonomous.

That is a meaningful shift from the Gensler-era posture that treated nearly every token as a security by default forever.

It also gives founders a concrete bar to aim for: build the network, deliver the promises, transition out of the security classification. That is the path the SEC is now openly endorsing.

I am not a lawyer, and I am writing this from the operator's chair, not the regulator's. Talk to actual securities counsel before you raise anything. But the framework is in motion, and you should understand the shape of it before the rule text drops.

Here is what's now possible that wasn't:

A US-based founder raising $250k to $5M for a software project, a media brand, a small fund — through a token sale, onshore, under the Startup Exemption — with minimal disclosure overhead. That was effectively illegal from 2017 to now. It is about to be on-ramped.

A more mature project raising up to $75M in a 12-month window — through a public token sale with proper disclosure, onshore — under the Fundraising Exemption. Reg A+ territory in scale, but native to on-chain issuance.

A community or utility token — for a SaaS audience, a media brand, a protocol — issued as a digital tool or digital collectible, outside the securities umbrella entirely, as long as the surrounding promises do not turn it into an investment contract.

Here is what still doesn't work:

Tokenizing real-world assets like real estate, music catalogs, or commodity pools still goes through asset-wrapper structures — and Reg Crypto is not the right tool for that. Reg Crypto is for token-as-asset issuance (the token itself is the capital being raised), not for wrapping an existing property or catalog. For real estate specifically, operators choose between offshore SPVs with Reg S distribution and US-domestic Wyoming LLC structures where the token is a membership interest and the property is managed by a third party. Different operators, different paths. Both are valid, and which one fits depends on your buyer base and how you want to handle disclosure.

Tokenizing public equities like Apple stock for retail buyers is still blocked. That sits in the Innovation Exemption lane, which is accredited-only by design. BlackRock will be there. Retail will not.

And nothing is law yet. The rule text has not been published. The comment period has not opened. The earliest you'd see binding rules is the second half of 2026.

But the direction is set. The signal is unambiguous. The US is opening an onshore lane for token fundraising for the first time in a decade.

The question every founder is going to ask is whether a Delaware LLC is the right vehicle for a Reg Crypto raise.

Honest answer: it depends on what you are tokenizing. There is no single right answer, and the people telling you there is one are selling you something.

For a real-world asset — a property, a fund of properties, a music catalog, a commodity pool — operators pick from a few legitimate paths. Some use offshore SPVs (Cayman or BVI) with Reg S international distribution. Others use US-domestic structures like Wyoming LLCs where the token is a membership interest in the LLC and a third party manages the asset and distributes cash flow back to members. Both can sit cleanly outside Reg Crypto, which is for token-as-asset issuance — not for wrapping an existing asset you already own. Pick the one that matches your buyer base and your operational story.

For startup equity issued through a token under the Startup or Fundraising Exemption, a Delaware C-Corp is going to be preferred over an LLC in most cases. C-Corps match how institutional counsel structures token-equity hybrids. They preserve QSBS treatment if you ever need it. They keep the door open for a traditional Reg A+ or IPO path later. A Delaware LLC works only if you have decided you will never institutional-raise the traditional way and want pass-through taxation.

For a community, utility, or governance token — the case where the token is a digital tool or digital collectible and not an investment contract — the structure is a Cayman foundation company or a Wyoming DAO LLC sitting alongside an operating company (HK Ltd, Singapore Pte Ltd, or Delaware C-Corp). The foundation or DAO LLC isolates the protocol layer. The operating company employs people and bills customers.

For a fundraise above $5M up to the $75M Reg Crypto cap, you are in institutional territory regardless of what the rule says. Delaware C-Corp, securities counsel, a registered transfer agent, KYC stack, real disclosure. Treat it like a Reg A+ in spirit. The exemption gives you the legal path. It does not give you a discount on operational discipline.

If you are building anything that touches on-chain capital formation, here is the calendar.

The Innovation Exemption is expected within weeks. Wall Street will move on it fast. Expect a wave of tokenized money market funds, tokenized public equity classes, tokenized Treasury products in the second half of 2026.

Reg Crypto is expected to enter public comment within weeks. The earliest workable timeline is final rules late 2026 or first half of 2027. That gives you the rest of this year to get your structure right.

The Clarity Act, the Senate bill that would put all of this on a statutory footing, is in motion. Senator Lummis has signaled May/June Senate movement. If it passes, the whole framework gets future-proofed past the next administration. If it doesn't, the rules still stand on existing SEC authority — but the floor is lower than founders should be comfortable with.

The right move right now is not to wait. Get the entity stack set up. Pick the structure that fits the asset. Talk to actual securities counsel. Start the disclosure scaffolding. The founders who are ready on the morning Reg Crypto goes live will own the first six months of the onshore token market.

I have spent eight years watching this industry get told by US regulators that it could not raise capital on its own rails. The argument is dead. The door is opening.

Build for the door.

If you are thinking about a token-fundraising structure and want help picking the entity stack, talk to me here [email protected]. The RWA tokenization software is at propex.app and tokeniz.ai.

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