Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

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

Based on the documents provided, it is unclear whether you can raise money through an initial coin offering (ICO) without violating securities laws in Wisconsin. However, there are some requirements that you should consider.

Requirements for ICOs

ICOs are a type of crowdfunding that involves the sale of digital tokens or coins to investors in exchange for funding. In the United States, ICOs are subject to securities laws, which means that they must comply with registration requirements unless they qualify for an exemption.

According to [1], entities can raise money through ICOs without having to comply with the registration requirements of securities laws if the tokens or coins being sold do not qualify as securities. However, determining whether a token or coin is a security can be complex and depends on the specific facts and circumstances of each case.

[3] explains that Wisconsin has proposed laws that would require ICO issuers to comply with certain reporting requirements and penalties for non-compliance. However, it is unclear whether these laws have been enacted or what specific requirements they impose.

SEC and CFTC Regulations

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are the primary regulators of ICOs in the United States. [2] notes that as of February 2018, individuals and businesses raised $1.66 billion through ICOs. The SEC and CFTC have not proposed rules regarding the regulations of cryptocurrency and other digital assets and instead have relied on informal rulemaking or enforcement actions.

The SEC has stated that tokens or coins that qualify as securities must be registered with the agency or qualify for an exemption. [2] notes that the SEC will ensure that only tokens that are securities are traded only on ATSes or national securities exchanges, which will have to go through all of those cybersecurity requirements.

Conclusion

Based on the documents provided, it is unclear whether you can raise money through an ICO without violating securities laws in Wisconsin. However, ICO issuers must comply with securities laws unless they qualify for an exemption. It is important to consult with legal counsel to determine whether your ICO complies with applicable securities laws.

Source(s):
Jurisdiction

Wisconsin