Under federal securities laws, a company looking to raise money by selling securities must register with the Securities and Exchange Commission (SEC) or qualify for an exemption. Rule 504 is one of those exemptions. Rule 504 is one of the exemptions under Regulation D that allows a company to raise…

A few months ago, I wrote an article discussing whether airdrops may violate the U.S. securities laws. At the time the article was published, the SEC had not yet spoken out about airdrops nor had penalized any blockchain company for giving away free tokens. In the past, the SEC has…

If you read my last post on Regulation A+ (Reg A+), you know you can use it to raise up to $50 million from anyone regardless of their net worth. …

If you are planning to sell security tokens or conduct a security token offering (STO) to raise money for your company, you have to either register your offering or find an exemption to registration. A registered offering allows you to sell your tokens to an entire spectrum of investors, regardless…

If you are doing a security token offering or STO, then you are concerned about complying with federal securities laws. This means you have to either register your STO or find an exemption to registration. Here are three exemptions you can use for your STO. The main points of each…

The SEC has used the Howey Test for investment contracts to determine whether the offer or sale of certain blockchain tokens are investment contracts and thus, securities. Under the Howey Test, the offer or sale of your tokens are offers or sales of securities if there is an investment of…

Lately, there has been an increased interest in security token offerings or “STOs” for blockchain startups looking to raise capital. STOs are a response to initial coin offerings or “ICOs” that were popular last year. ICOs Were the Precursors to STOs What is an ICO? In an ICO, blockchain startups raised money by issuing and selling…

If you are raising money for startup and especially if you are a blockchain startup intending to sell your company’s native tokens to raise money, you must understand what a security is and whether you are selling a security. If you are selling a security, you must register with the…

Token sales or initial coin offerings (“ICOs”) were once regarded as a way to make investment opportunities available to mainstreet investors and to distribute wealth to them. By selling blockchain tokens, token issuers sought not only to raise money for their blockchain projects, but also to build a community. For…