{"id":786,"date":"2018-09-25T18:59:04","date_gmt":"2018-09-25T13:29:04","guid":{"rendered":"https:\/\/blockchainappfactory.com\/blog\/?p=786"},"modified":"2018-09-25T20:11:29","modified_gmt":"2018-09-25T14:41:29","slug":"part2-the-regulations-begin-new-way-for-security-token-offering","status":"publish","type":"post","link":"https:\/\/www.blockchainappfactory.com\/blog\/part2-the-regulations-begin-new-way-for-security-token-offering\/","title":{"rendered":"Part 2 – Let the Regulations Begin! A New Way for Security Token Offering"},"content":{"rendered":"

The previous blog<\/a><\/strong> talked about the assets which can be tokenized and the differences between the two types of STOs. This blog will be about the SEC regulatory compliance for STOs.<\/span><\/p>\n

Note: <\/strong>The Following Blog is for companies who want to register in accordance with USA\u2019s SEC regulations. We will publish a blog with European regulatory requirements soon!<\/em><\/span><\/p>\n

The Following are the Regulations to abide<\/span><\/h3>\n

1.Founder\u2019s Exemption- Sec 4(a) (2)<\/strong><\/span><\/h4>\n

This is one of the most regularly relied upon exemptions under the Securities Act. However, it is the least known. SEC 4(a) (2) refers to the exemption of sale of securities that is not considered a public sale. The security tokens can be offered to the initial founders and early team members through Founder\u2019s Exemption.<\/span><\/p>\n

2. Reg D – Rule 506(c)<\/strong><\/span><\/h4>\n

This is commonly referred to as the accredited investors crowdfunding exemption and is the most commonly used exemption. This will help you raise funds without a cap, however, only accredited investors can participate in it. Additionally Rule 506(c) also states that there must be a minimum of 12 month lock-in period.<\/span><\/p>\n

3. Rule 506(b)<\/strong> <\/span><\/h4>\n

The rule is similar to the 506(c) however, the key differences are :<\/span><\/p>\n