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Can I raise money through an initial coin offering (ICO) without violating securities laws in Arizona? What are the requirements?

Requirements for Conducting an ICO in Arizona

In Arizona, the offer and sale of securities must be registered or exempt from registration under the Arizona Securities Act [5]. An initial coin offering (ICO) may be considered the offer and sale of securities, depending on the facts and circumstances of the offering [2].

To determine whether an ICO is a security, the SEC applies the Howey test, which examines whether the ICO involves an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others [4]. If the ICO meets this definition, it is likely a security and subject to securities laws.

If you want to conduct an ICO in Arizona, you must comply with the state’s securities laws. This may include registering the offering with the Arizona Corporation Commission or qualifying for an exemption from registration [5].

Some exemptions from registration that may be available for ICOs include the intrastate offering exemption, the crowdfunding exemption, and the private placement exemption [2]. However, each exemption has specific requirements that must be met, and failure to comply with these requirements could result in violations of securities laws [2].

Therefore, it is important to consult with a securities attorney familiar with Arizona law to determine the requirements for conducting an ICO in compliance with securities laws.

In summary, you cannot raise money through an ICO in Arizona without complying with the state’s securities laws. The offer and sale of securities must be registered or exempt from registration under the Arizona Securities Act, and failure to comply with these laws could result in violations of securities laws [2][5].

Source(s):
Jurisdiction

Arizona