A New Era for U.S. Token Launches
The Digital Asset Market CLARITY Act of 2025 could reshape how tokens are launched and traded in the United States. For years, U.S. issuers have been stuck between limited accredited-only sales under Regulation D, offshore offerings under Regulation S, or riskier paths that leave secondary trading in a gray zone. The CLARITY Act introduces something new: a tailored exemption under Securities Act § 4(a)(8), written specifically for digital assets.
For a deeper dive into how the CLARITY Act is structured, see our analysis here.
Why § 4(a)(8) Matters
The CLARITY Act is more than just another securities exemption. It represents a recognition by lawmakers that digital assets don’t fit neatly into the frameworks designed for traditional equity or debt. Tokens are dynamic: they often begin their life as investment contracts sold to bootstrap a network, but as that network grows and matures, the tokens may function more like commodities or utilities than securities.
By creating a legal pathway that mirrors this lifecycle, § 4(a)(8) could unlock participation for a far broader range of investors. Instead of limiting early access to accredited investors, the framework would permit retail involvement—within carefully set limits—to help build the very communities that make networks succeed. For projects, that means the ability to raise meaningful capital in the U.S. without having to rely on offshore jurisdictions or gray-market workarounds.
For exchanges, ATSs, and custodians, the Act provides a roadmap to integrate tokens that begin as securities but can later trade as commodities, with the kind of regulatory clarity that has been missing for years. And for investors, both institutional and individual, it creates transparency through disclosure, caps risk through investment limits, and sets a defined timeline for when tokens may achieve freer trading.
In the bigger picture, this exemption matters because it signals a shift in how Washington is approaching crypto. It acknowledges the unique nature of blockchain-based assets, attempts to balance innovation with investor protection, and gives both regulators and markets a common framework to work from. If implemented well, § 4(a)(8) could serve as the long-awaited bridge between early-stage crypto projects and the U.S. capital markets. For context, see the SEC’s overview of exempt offering frameworks to understand how § 4(a)(8) would add to existing tools.
Who Benefits
The clearest beneficiaries of § 4(a)(8) will be projects that want to raise capital while also building genuine communities. Foundations and companies with functional networks can look beyond accredited-only rounds and involve the very users who give their protocol life. Protocols and funds that previously leaned on offshore structures can finally plan a U.S.-based strategy that is compliant, transparent, and scalable.
This exemption also supports dual-track planning. Issuers can run a Regulation D or Regulation S private round today while preparing for a § 4(a)(8) filing when the exemption becomes effective. That creates continuity for early investors, developers, and end-users, ensuring the project is not locked into one narrow fundraising model.
Exchanges, ATSs, and custodians will benefit as well. With a clear framework for assets that begin as securities but transition to commodities, they can design listing and custody solutions that are both compliant and liquid. This kind of clarity has long been missing from U.S. markets, and its arrival could encourage more robust secondary trading infrastructure.
Of course, not every asset qualifies. Tokenized stock, partnership interests, and other traditional securities remain on the securities track, regardless of tokenization. The exemption is designed for digital assets that may mature into commodities, not for securities in new wrappers.
For additional context on how this fits into Montague Law’s broader digital asset work, visit our Cryptocurrency & Digital Assets practice page.
Issuer Obligations
The CLARITY Act sets out obligations that go beyond simply filing paperwork. These requirements are designed to align token launches with investor protection principles while recognizing the unique features of blockchain projects.
Eligibility comes first. Only U.S.-organized entities may rely on § 4(a)(8), and issuers must not be subject to “bad actor” disqualification. This ensures that the exemption is available only to projects that meet baseline standards of integrity.
Disclosure is the next layer. Before any tokens are sold, an issuer must file a public information statement with the SEC. This document will likely resemble a scaled-down registration statement, detailing the issuer’s business plan, tokenomics, governance framework, insider holdings, risk factors, and use of proceeds. Unlike traditional filings, however, these disclosures must line up with the actual code, economics, and governance of the project.
Ongoing reporting is also mandatory. Issuers must provide semiannual updates until their blockchain is deemed “mature.” This requirement creates accountability: investors should always know how the project is progressing, rather than being left in the dark after launch.
Financial limits are built in. An issuer cannot raise more than $75 million in a twelve-month period, and individual investors cannot exceed ten percent of income or net worth. These caps broaden participation but guard against overexposure.
Finally, compliance must be embedded in the token itself. Smart contracts will need to enforce offering limits, lock-ups, transfer restrictions, and KYC or KYB requirements. This reflects a larger theme of the CLARITY Act: legal rules must translate into technical reality.
For a sense of how public information statements and updates may be filed, issuers can review the SEC’s EDGAR filing system, which is the likely channel for § 4(a)(8) disclosures.
Resale and Secondary Training
One of the most innovative features of § 4(a)(8) is its two-phase approach to secondary markets. In the first phase, tokens sold under the exemption are treated as securities. They are subject to the limits of the offering, the disclosures filed with the SEC, and the on-chain restrictions issuers must build into their contracts. This keeps early activity transparent and controlled, while still allowing broad participation under the exemption.
The second phase begins when the blockchain is deemed “mature.” At that point, qualifying tokens no longer trade under the resale rules that normally apply to securities. Instead, they are treated as commodities, with transactions overseen under CFTC-style rules that focus on market integrity and anti-fraud protections. This shift matters because it provides a clear runway: issuers know that tokens won’t remain locked inside securities law forever, and investors know there is a path toward freer secondary liquidity.
For exchanges and custodians, this dual-phase model offers clarity that has been absent from U.S. markets. Platforms can plan listing standards, custody solutions, and surveillance systems knowing that tokens will follow a predictable lifecycle. For issuers and communities, it means that secondary trading is not left in a gray area—it is recognized as part of the token’s natural evolution.
Traditional securities remain unaffected by this exemption. Tokenized stock, LP interests, or other equity-like instruments do not convert into commodities simply because they are placed on a blockchain. They remain subject to existing securities resale rules, including Rule 144, Regulation S, or ATS-based trading.
The takeaway is that § 4(a)(8) finally offers a regulatory framework that tracks how digital assets actually work: they begin as securities, but may evolve into commodities once networks reach maturity. That recognition, if carried through in rulemaking, could unlock U.S.-based liquidity that has so far been pushed offshore.
Preparing Now
Although the CLARITY Act is still in draft form and requires SEC and CFTC rulemaking before it can be used, forward-looking projects do not need to wait. In fact, the history of securities exemptions shows that those who prepare early are the ones who move fastest once a framework goes live.
Evaluate feasibility
Projects should begin by assessing whether their tokens qualify as “investment contract assets” under the proposed law rather than traditional securities. This means looking closely at network utility, governance structures, and token economics to determine whether the project will fit the exemption.Plan the structure
Many issuers are already considering dual-track fundraising strategies: raising capital today through a Regulation D or Regulation S round while preparing the groundwork for a § 4(a)(8) filing later. This approach ensures continuity while avoiding compliance gaps.Draft disclosure materials
Documentation is key. Issuers should begin developing tokenomics memos, governance policies, risk factors, and marketing standards now. These will not only be required for SEC filings but will also give investors and internal stakeholders clarity and confidence.Integrate compliance into code
The exemption anticipates compliance-by-design. Issuers should build smart contract logic to enforce investor caps, lock-ups, and KYC requirements alongside legal documentation. Starting this process early helps avoid expensive technical redesigns later.Map the vendor stack
Launch-readiness depends on more than law and code. Custodians, KYC/KYB providers, auditors, and ATSs will all play a role in the offering. Identifying and securing vendor relationships in advance is crucial to avoid delays.
For context, the SEC’s FinHub resources emphasize how emerging technologies benefit from early regulatory engagement. The same lesson applies here: preparing now is not optional if you want to be first in line when § 4(a)(8) becomes available.
Montague Law's Perspective
At Montague Law, we see § 4(a)(8) as more than a new exemption — we see it as a potential turning point for how the United States approaches digital assets. For years, our work with issuers, funds, and exchanges has revealed the same pain point: projects want to build openly in the U.S., but the law has not offered a framework that makes it possible. The CLARITY Act begins to change that by creating a lifecycle that matches the reality of token development.
Our philosophy is compliance by design. That means helping clients draft disclosure documents that match their code, structuring governance frameworks that regulators can respect but developers can actually implement, and translating legal rules into on-chain mechanics such as investor caps, transfer restrictions, and KYC gating. Too often, legal advice is siloed away from product development; our role is to bridge the two so that law and technology move in step.
We also focus on execution. A § 4(a)(8) raise is not just about filing with the SEC — it requires a coordinated vendor stack that includes KYC providers, custodians, auditors, oracles, and listing venues. Our experience in securities law and blockchain-native deals allows us to quarterback these processes so that issuers are not just legally compliant, but also practically launch-ready.
Finally, we emphasize risk management. The exemption is not yet live, and SEC and CFTC rulemaking will be crucial to its final shape. In the meantime, we help clients design dual-track fundraising strategies that allow capital formation today under Regulation D or Regulation S, while ensuring that everything is aligned for a § 4(a)(8) filing once forms are published. This way, projects can keep building without putting themselves in legal jeopardy.
Conclusion
The CLARITY Act § 4(a)(8) exemption may become one of the most significant milestones in U.S. digital asset law. For the first time, legislation would recognize that tokens do not remain static—they can begin life as securities, but over time may function more like commodities once networks are operational. By blending structured disclosures, investor protections, and a maturity path into commodity treatment, Congress is signaling that it is ready to engage with crypto on its own terms rather than forcing projects into outdated categories.
For issuers, this means the chance to raise meaningful capital from a broader community without leaving the U.S. For exchanges and custodians, it provides a roadmap to design infrastructure that is legally recognized and practically useful. And for investors, it introduces transparency, caps, and a defined timeline that balances access with protection.
The exemption is not yet law, and much will depend on how the SEC and CFTC implement it. But the direction is clear. U.S. policymakers are beginning to align law with technology in a way that could finally allow compliant, retail-accessible token markets to flourish. For context on how the CFTC views digital asset oversight, see its guidance on virtual currencies.
At Montague Law, we are preparing clients to be ready on Day One. By structuring bridge rounds, drafting disclosure-ready documentation, and embedding compliance directly into token design, we help issuers and investors alike take advantage of this evolving landscape. To learn more about our approach, explore our Cryptocurrency & Digital Assets practice page.
Let a Digital Assets Attorney Help
Do you have more questions about crypto and the law? Our team at Montague Law can provide you with the answers you want. You can easily contact one of our digital asset attorneys by calling us at 904-234-5653. Allow us to walk you through each step of this legal process.