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

Requirements for Raising Money through an ICO in Massachusetts

If you are planning to raise money through an initial coin offering (ICO) in Massachusetts, you must comply with the state and federal securities laws. The Securities and Exchange Commission (SEC) has stated that ICOs can be considered securities offerings and subject to federal securities laws [1]([2]:)[3]. Massachusetts has also taken a strict stance on ICOs, with the state’s securities regulator issuing a warning to investors about the risks associated with ICOs [2].

To comply with securities laws, you must register your ICO with the SEC or qualify for an exemption from registration. The SEC has provided guidance on when an ICO may qualify for an exemption, such as if the tokens are not marketed as investments and have a functional use on a platform [3]. However, the requirements for exemptions can be complex and may require legal assistance.

Additionally, Massachusetts has its own securities laws that may apply to ICOs. The state requires that all securities offerings be registered or qualify for an exemption [2]. Massachusetts also has a crowdfunding exemption that allows for small offerings to be made to Massachusetts residents [2].

In summary, if you plan to raise money through an ICO in Massachusetts, you must comply with both federal and state securities laws. This may include registering your ICO with the SEC or qualifying for an exemption, as well as complying with Massachusetts securities laws. It is recommended that you seek legal assistance to ensure compliance.

[3]:

Source(s):
Jurisdiction

Massachusetts