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Can I raise money through an initial coin offering (ICO) without violating securities laws in Missouri? What are the requirements?
Requirements for Raising Money through an Initial Coin Offering (ICO) in Missouri
In Missouri, the sale of securities, including those offered through an ICO, is regulated by the Missouri Securities Division (MSD) [2]. The MSD requires that all securities offerings be registered or exempt from registration under the Missouri Securities Act [2].
To determine whether an ICO is exempt from registration, the MSD 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 entrepreneurial or managerial efforts of others [2]. If the ICO meets the criteria of the Howey test, it is considered a security and subject to registration or exemption [2].
Missouri offers several exemptions from registration, including the intrastate exemption, which allows for the sale of securities to Missouri residents only [2]. To qualify for this exemption, the issuer must meet certain requirements, such as being organized under Missouri law and conducting a significant amount of business within the state [2].
Additionally, the MSD requires that all securities offerings, including those offered through an ICO, comply with anti-fraud provisions under the Missouri Securities Act [2]. This includes providing investors with full and fair disclosure of all material facts related to the investment [2].
Therefore, to raise money through an ICO in Missouri without violating securities laws, the ICO must either be registered with the MSD or qualify for an exemption from registration, such as the intrastate exemption. The ICO must also comply with anti-fraud provisions under the Missouri Securities Act and provide investors with full and fair disclosure of all material facts related to the investment.
[2]Source(s):
Jurisdiction
Missouri