United States’s security token offering Regulation
As a leading innovation hub, the United States is relatively embracing in terms of regulations. While there is no sole regulation on initial coin offerings (ICOs) and security token offerings (STOs), or classification of tokens, the SEC allows STOs.
The regulator’s biggest concern of tokens is whether the issued token is a ‘security’ under the Securities Act of 1933 and the Securities Exchange Act of 1934. In short, the SEC would apply the existing rules on policing STO.
Entities issuing security tokens are subject to Federal Law. In general, security tokens must be registered with the SEC and comply with the Security Act. However, if certain terms are met, they may be exempt from registration, such as Reg A+, Reg D and Reg S.
‘A change in the structure of a securities offering does not change the fundamental point that when a security is being offered, our securities laws must be followed,’ the SEC Chairman Jay Clayton mentioned in a statement on December 11, 2017.