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

Requirements for ICOs in Colorado

To raise money through an initial coin offering (ICO) in Colorado without violating securities laws, you must comply with the Colorado Securities Act. The Act requires that all securities offered or sold in Colorado be registered with the Colorado Division of Securities or be exempt from registration [2].

To determine if your ICO is exempt from registration, you must meet one of the following requirements [2]:

  • The ICO is sold only to accredited investors.
  • The ICO is sold only to Colorado residents and the total offering amount is less than $5 million.
  • The ICO is sold only to Colorado residents and the issuer has a physical presence in Colorado.

If your ICO does not meet any of these requirements, you must register with the Colorado Division of Securities before offering or selling securities in Colorado [2].

Additionally, you must provide investors with full and fair disclosure of all material information about the ICO, including the risks involved [2].

Conclusion

To raise money through an ICO in Colorado without violating securities laws, you must comply with the Colorado Securities Act and meet one of the exemption requirements or register with the Colorado Division of Securities. You must also provide investors with full and fair disclosure of all material information about the ICO.

Source(s):
Jurisdiction

Colorado