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The Truth About STOs and Liquidity

The Truth About STOs and Liquidity

This article is about liquidity in security token offerings. There’s an idea that security token offerings or STOs are more liquid than traditional securities offerings. While blockchain technology may enable a security token to be more liquid in the long run, raising money with an STO does not automatically provide liquidity to investors. What is a STO? An STO is a way that companies raise money by selling blockchain tokens that are considered securities. This is a response

The SEC's Approach to Post-DAO ICOs

The SEC's Approach to Post-DAO ICOs

Last Friday, the SEC settled charges against two companies, CarrierEQ Inc. dba Airfox (“Airfox”) and Paragon Coin Inc. (“Paragon”), which raised money with initial coin offerings (“ICOs”). The SEC found that both companies violated the registration provisions of the U.S. securities laws because neither company registered their offering nor qualified for an exemption to registration. As a consequence, the SEC fined each company $250,000 and required them to register their tok

Raise Money Without Being Forced to Give Information

Raise Money Without Being Forced to Give Information

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 money without registering with the SEC. Other exemptions under Regulation D include Rules 506(b) and 506(c). Rule 506 focuses primarily on raising money from accredited investors,