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ICO MARKETING REGULATIONS

Dilendorf & Khurdayan are blockchain lawyers in New York City offering expert legal assistance to ICO sponsors in connection with marketing their token sales to prospective purchasers through third parties.

Our attorneys assist in developing, reviewing, and implementing third-party marketing of an ICO to ensure compliance with relevant laws.

ATTORNEYS' EXPERIENCE

Represented a blockchain based gaming platform in connection with structuring Regulation D and S offerings, including full review of the project, drafting a private placement memorandum and purchase agreement to launch the sale, guidance through the process of verifying U.S. accredited investors and completing KYC/AML checks, and filing form D with the SEC.

Represented B2B / B2C blockchain freelance platform in the process of raising capital through Regulation D and S offerings to U.S. and non-U.S. investors, including review and analysis of the white paper and the project, preparation of the private placement memorandum (PPM), subscription agreements, guidance regarding the process of investor accreditation as well as AML/KYC checks, and filing Form D with the SEC.

Represented a blockchain based gaming platform in connection with structuring Regulation D and S offerings, including full review of the project, drafting a private placement memorandum and purchase agreement to launch the sale, guidance through the process of verifying U.S. accredited investors and completing KYC/AML checks, and filing form D with the SEC.

Represented a decentralized crypto exchange platform and advised the company regarding the process of raising capital in the U.S. through SEC Regulation A+ and D offerings, including money transmitting licenses in all 50 states, preparation of all necessary offering documents to launch token sale in the U.S.

Regulation of Brokers and the Risk to Virtual Token Sales

When launching a token-generation event, many blockchain businesses rely in part on bounty campaigns or agreements with marketing companies to market their token sale. In a bounty campaign, the business offers compensation to any individuals who complete certain specified tasks related to marketing, debugging, or otherwise helping with the token sale.

However, if a virtual token is a security, then any person who receives compensation for marketing it may qualify as a broker under the U.S. Securities Exchange Act of 1934 (the “Exchange Act”). The Exchange Act requires that any broker be registered with the Securities and Exchange Commission (“SEC”). The SEC may halt the offering of a security (such as a token sale) if even one person acting as a broker in that offering is not registered.

Determining who is a broker under SEC regulations requires assesses the unique facts and circumstances of a given relationship. The SEC considers a number of factors in making that determination, including whether a person participates in soliciting a securities transaction and whether his or her compensation is related to the outcome of such a transaction.

Providing Legal Guidance for Our Clients’ ICO Marketing Needs

The risk posed to a token sale by the inadvertent use of unregistered brokers can make the difference between a successful launch and failure. Our attorneys apply their expertise in the areas of securities laws and regulations to develop marketing strategies that are sensitive to the application of such laws and regulations to token-generation events, including by:

  • Reviewing existing relationships with third parties engaged or to be engaged in marketing a token sale to ensure compliance with U.S. laws governing the use of brokers.
  • Carefully structuring bounty campaigns and other marketing efforts involving third parties to reduce or eliminate the risks associated with broker regulations.
  • Drafting, reviewing, or modifying agreements with marketing companies to ensure compliance with U.S. law.

Contact Us to Learn More About Our Legal Services for ICO Marketing

Send us an email or call 212.457.9797 to schedule a consultation at our Manhattan office.

For a consultation about ICO marketing regulations -

please contact Dilendorf & Khurdayan by sending an email or calling us at 212.457.9797.

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