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

Requirements for Raising Money through an Initial Coin Offering (ICO) in North Carolina

If you are planning to raise money through an initial coin offering (ICO) in North Carolina, you must comply with the securities laws of the state. The North Carolina Securities Division has issued Cease and Desist Orders against companies promoting unregistered and potentially fraudulent securities in North Carolina in the form of ICOs ^[4].

To avoid violating securities laws in North Carolina, you must register your ICO with the North Carolina Securities Division or qualify for an exemption from registration requirements. The offer and sale of unregistered securities, sales by unregistered agents, and engaging in fraudulent practices are common securities law violations by companies promoting ICOs ^[4].

It is important to note that the SEC has filed complaints against companies for conducting fraudulent initial coin offerings of unregistered digital asset securities raising money from thousands of investors ^[1]. Therefore, it is crucial to ensure that your ICO complies with both state and federal securities laws.

In summary, to raise money through an ICO in North Carolina, you must comply with the state’s securities laws, register your ICO with the North Carolina Securities Division, or qualify for an exemption from registration requirements. It is also important to ensure that your ICO complies with federal securities laws.

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Source(s):

• [1] Crypto Assets and Cyber Enforcement Actions - SEC.gov
• [4] SECURITIES DEPARTMENT ISSUES ORDERS AGAINST …

Jurisdiction

North Carolina

• General