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

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

If you are planning to raise money through an initial coin offering (ICO) in Wyoming, you must comply with the state and federal securities laws. Failure to comply with these laws can result in severe penalties, including fines and imprisonment.

Definition of a Security

The first step in determining whether your ICO is subject to securities laws is to determine whether your digital asset qualifies as a security. The U.S. Securities and Exchange Commission (SEC) has stated that most ICOs involve the offer and sale of securities and are subject to federal securities laws [1]([3]:).

The SEC uses the Howey test to determine whether a digital asset is a security. Under the Howey test, a digital asset is a security if it meets the following criteria:

  • It is an investment of money
  • There is an expectation of profits from the investment
  • The investment of money is in a common enterprise
  • Any profit comes from the efforts of a promoter or third party

If your digital asset meets these criteria, it is likely a security and subject to securities laws.

Compliance with Securities Laws

If your ICO involves the offer and sale of securities, you must comply with the securities laws of the state in which you are offering the securities, as well as federal securities laws.

In Wyoming, the Wyoming Division of Banking regulates the offer and sale of securities [3]. To comply with Wyoming securities laws, you must register your ICO with the Wyoming Division of Banking or qualify for an exemption from registration.

To qualify for an exemption from registration, you must meet certain requirements, such as limiting the offer and sale of your digital asset to accredited investors or limiting the amount of money you raise [4].

Conclusion

In conclusion, if you are planning to raise money through an ICO in Wyoming, you must comply with state and federal securities laws. You must determine whether your digital asset qualifies as a security and comply with the securities laws of the state in which you are offering the securities. To comply with Wyoming securities laws, you must register your ICO with the Wyoming Division of Banking or qualify for an exemption from registration.

[4]:

Source(s):
Jurisdiction

Wyoming