Are US residents allowed to contribute in our token sales?

3 min readDec 30, 2017

Unfortunately due to the ever tighter regulations being imposed by the SEC and their position on token sales, we will be unable to accept contributors from the US for the time being.

We have spent a great deal of resources looking into this, getting legal advice etc. The trouble is even though it is a very grey area, the risk is too great for us to put all the hard work we are doing on the project, for the SEC to destroy it down the road.

The trouble is the SEC have stated they are yet to come across any ICO/token sale that is not considered a security — even if the project changes the language used to describe it. This is a concern because there have been a great deal of projects that proclaim to not be a security, so for the SEC to have not come across it means they are not ‘buying’ into this Utility concept.

Ultimately we have to take tough decisions that are best for the future of the project, as much as we would like to accept US residents. We may possibly apply for a Reg D exemption, which would permit us accepting accredited US investors.

Want to know a little more about the regulatory challenges we face?

Here’s a really interesting podcast from ICO Alert, featuring former Securities Attorney and Founder of Bootstrap Legal, Amy Wan.

Plus, here is a list of questions a commissioner from the SEC provides if you are considering entering an ICO:

full article here: https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11

Sample Questions for Investors Considering a Cryptocurrency or ICO
Investment Opportunity[8]

Who exactly am I contracting with?

Who is issuing and sponsoring the product, what are their backgrounds, and have they provided a full and complete description of the product? Do they have a clear written business plan that I understand?
Who is promoting or marketing the product, what are their backgrounds, and are they licensed to sell the product? Have they been paid to promote the product?
Where is the enterprise located?

2. Where is my money going and what will be it be used for? Is my money going to be used to “cash out” others?

3. What specific rights come with my investment?

4. Are there financial statements? If so, are they audited, and by whom?

5. Is there trading data? If so, is there some way to verify it?

6. How, when, and at what cost can I sell my investment? For example, do I have a right to give the token or coin back to the company or to receive a refund? Can I resell the coin or token, and if so, are there any limitations on my ability to resell?

7. If a digital wallet is involved, what happens if I lose the key? Will I still have access to my investment?

8. If a blockchain is used, is the blockchain open and public? Has the code been published, and has there been an independent cybersecurity audit?

9. Has the offering been structured to comply with the securities laws and, if not, what implications will that have for the stability of the enterprise and the value of my investment?

10. What legal protections may or may not be available in the event of fraud, a hack, malware, or a downturn in business prospects? Who will be responsible for refunding my investment if something goes wrong?

11. If I do have legal rights, can I effectively enforce them and will there be adequate funds to compensate me if my rights are violated?

Are US residents allowed to contribute in our token sales?

Want to know a little more about the regulatory challenges we face?

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Written by Force Protocol