US crypto policy is beginning to confront a question that token markets have often avoided: What, exactly, must change before an asset sold through an investment contract can trade as something else?
The answer could shape more than token listings. It may influence how projects raise capital, when their tokens reach decentralized exchanges, which assets lending protocols are willing to support and whether liquidity remains concentrated outside the United States.
Messari Research describes a proposal intended to structure an exit from securities status for certain crypto assets. Its assessment is cautiously positive but highlights a consequential limitation: the proposed exemptions apply only to “covered investment contracts,” defined under Rule 100 as contracts in which the crypto asset is the sole asset involved.
That condition could exclude the equity-plus-token-warrant package widely used in crypto venture financing.
This is not merely a drafting technicality. If the legal route to broader token trading is easier for a token-only contract than for a financing package combining company equity and future token rights, issuers may eventually face a choice between a familiar venture structure and a clearer path into onchain markets.
Capital formation and token liquidity are colliding
Crypto startups have frequently occupied two financial worlds at once.
They raise money like technology companies, using private investment structures and ownership claims. But they also plan networks whose tokens may later trade continuously, provide governance rights, pay transaction costs or serve as collateral across decentralized finance.
An equity-plus-token-warrant arrangement reflects that dual identity. Investors receive exposure to the company and a contractual claim on tokens that may be issued later. The structure can separate early financing from the uncertain timing and design of a network launch.
Messari’s reading suggests that this same combination could create a problem under the proposal. If a covered contract must involve the crypto asset as its sole asset, packaging token rights with equity may place the transaction outside the contemplated exemptions.
The result would be an uneven path to market. Two projects could build similar networks and issue functionally similar tokens, yet receive different treatment because one raised money through a token-only agreement while the other combined token rights with corporate equity.
That difference would matter to DeFi because legal uncertainty follows assets into secondary markets.
DeFi liquidity starts with issuance structure
Decentralized exchanges can create markets quickly, but they cannot erase uncertainty inherited from an asset’s original sale.
Liquidity providers must decide whether trading fees justify token-specific risks. Lending protocols need to determine whether an asset is reliable enough to accept as collateral. Front ends and other service providers may consider whether an asset can be made available to US users. Data platforms must decide how to classify supply, capitalization and related instruments.
A token without a credible route beyond its original investment contract may therefore encounter several constraints:
- fewer willing market makers and liquidity providers; - more cautious collateral parameters; - limited integration by US-facing applications; - fragmented trading across venues and jurisdictions; - greater dependence on offshore liquidity.
None of those outcomes is guaranteed by the proposal. The supplied research does not establish how regulators, courts, exchanges or DeFi protocols would treat any specific asset. But the structure of an exemption can affect the confidence with which market participants support a token.
That confidence is part of liquidity. A pool can display a large nominal value while remaining vulnerable to shallow exits, correlated collateral or sudden restrictions on access.
A token-only route would carry its own costs
It would be premature to conclude that issuers should simply abandon equity-plus-token-warrant financing.
A token-only investment contract may fit more neatly within the proposal as Messari describes it, but legal eligibility is not the only concern in capital formation. Issuers and investors still need to define what the buyer is funding, what rights attach to the agreement and how the project will operate before a network is functional.
The proposal could therefore influence behavior without producing a clean industrywide shift. Some issuers may preserve traditional venture structures and accept a less direct regulatory path for the token. Others may separate corporate and token financing more sharply. Still others may delay token issuance until the network and its economic purpose are more developed.
Each option affects onchain markets differently.
A delayed launch can reduce the period in which a lightly developed token trades primarily on expectations. Conversely, a token-focused financing model could align the investment contract more directly with the network asset, but it could also concentrate financing risk in that asset.
The relevant question is not which structure produces the fastest listing. It is which structure creates a defensible transition from private fundraising to a liquid, operational network.
Market data must distinguish liquidity from duplicated claims
The growth of onchain finance creates another complication: one underlying asset can support multiple tradable claims.
CoinGecko has announced changes to how it categorizes and ranks rehypothecated tokens, including wrapped assets and related instruments. The change addresses a broader accounting problem for DeFi: capital efficiency can look like capital creation when the same economic exposure appears across several tokens.
That issue intersects with token issuance policy. If new regulatory routes bring more assets into onchain markets, investors will need to distinguish among the original token, wrapped representations and claims created when collateral is reused elsewhere.
A higher aggregate market capitalization does not necessarily mean more independent capital has entered the system. Likewise, liquidity distributed across several representations may not remain available if those claims depend on the same collateral or redemption mechanism.
For small businesses and retail users, this matters when selecting pools, lending markets or treasury assets. The ticker displayed by an application does not fully describe the claim being held. Users need to know whether they own the native asset, a custodial wrapper, a receipt token or an instrument backed by collateral that may be deployed again.
Regulatory clarity at issuance would help, but it would not solve this balance-sheet problem.
Protocol governance will still decide where tokens can go
Even if a token qualifies for a defined regulatory transition, DeFi access is not automatic.
Lending and derivatives protocols must still assess liquidity depth, oracle quality, volatility, concentration and the reliability of available trading venues. Governance participants may need to approve collateral listings or establish exposure limits. Risk managers must consider how quickly a position can be liquidated under stress.
A legal pathway can remove one source of uncertainty without turning an asset into sound collateral.
That distinction is especially important for protocols seeking capital efficiency. Adding more collateral types can increase borrowing capacity and fee generation, but it can also introduce assets whose apparent liquidity disappears during market stress. If a token’s trading base is narrow because its issuance history remains disputed or its US availability is limited, aggressive collateral treatment can transmit that weakness into the wider protocol.
The practical standard should therefore remain demanding: regulatory status, market liquidity and collateral fitness are separate tests.
What US market participants should watch
The proposal’s eventual importance will depend on details beyond the available summary. For now, the most useful signals are structural.
Issuers should examine whether their fundraising contracts combine equity and token rights, rather than assuming that any route out of securities status would apply uniformly. Investors should treat claims about future regulatory transitions cautiously when the underlying agreement includes multiple assets or rights.
DeFi protocols, meanwhile, should not wait for a token’s status to become contentious before documenting how issuance history affects listing and collateral decisions. Risk frameworks should account for the asset’s legal path alongside its oracle, liquidity and concentration risks.
Finally, users should watch how market-data providers classify related token claims. A regulatory transition could expand the universe of tradable assets, while wrapping and rehypothecation make that universe appear larger still.
The grounded takeaway is that US token policy may begin shaping DeFi well before any asset reaches a decentralized exchange. If the route to broader trading depends on how the original financing was constructed, capital formation is no longer separate from liquidity design. It is the first layer of it.