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Dilendorf Law Firm assists U.S. and international clients in launching tokenized Regulation C.F. offerings (STOs) in the U.S.

Regulation Crowdfunding enables eligible companies to raise a maximum aggregate amount of $5 million through the sale of tokenized securities. 

Our attorneys guide clients at every stage of their Reg. C.F. tokenized offerings.  

We advise clients on appropriate structures and consequences of asset tokenization – be it real estate, startups, or income-producing assets- and listing tokenized Reg. C.F. securities on regulated ATS platforms in the U.S. and abroad.



Represented FinTech company developing a digital currency exchange and e-commerce platform in structuring STO, including defining several types of security tokens with and without rights to dividend distribution and structuring complex distribution rights and restrictions for different types of security tokens


Represented company in structuring STO for raising capital to develop renewable energy farms and data centers in the US and abroad, including assisting with the preparation of the private placement memorandum, subscription agreements and providing guidance with the process of investor accreditation as well as AML/KYC checks


Advised client regarding the process of tokenizing a commercial property in the Midwest, including identifying applicable securities regulations and token transfer restrictions for US and non-US investors, selecting legal structure for tokenization (LP, SPV, Trustee), assisting with the underwriting process on a smart-contract and issuing issuing compliant tokenized securities


Consulted fund manager on setting up SPV for the tokenization of LP interest in a venture capital fund, including advising on structure’s classification for purposes of US and Cayman securities regulations

Opportunities Provided under Regulation CF

Regulation Crowdfunding enables eligible companies to offer and sell traditional and tokenized securities through crowdfunding.

By going through STO process, companies and funds can raise capital from investors while benefiting from the advantages that blockchain affords, including:

  • simplified access to capital on a global scale – US crowdfunding laws permit companies to raise funds from U.S. and non-US investors;
  • permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period;
  • secondary market trading of tokenized Regulation CF securities on regulated ATS platforms;
  • Fractionalization of ownership;
  • Increased transparency and security; and
  • Simplified investors’ management.

Defining the Scope of Regulation CF STOs

Reg. CF STO can be any offering and sale of digital tokens that are considered securities under U.S. laws . Accordingly, the scope of Reg. CF STO is very broad and may include, for example:

  • Real estate;
  • Startups;
  • Operating businesses;
  • Art, luxury art, precious stones and collectibles; and
  • Profit-sharing right in a business entity, etc.

Secondary Trading of Reg. CF Security Token Offerings

To launch a successful Reg. CF STO, issuers will need to meet compliance standards, create a stable governance structure, and have shares that are able to be traded on the secondary markets called Alternative Trading System platforms (“ATS”) in the US and overseas.

Finally, the minted Reg. CF STO tokens must be compatible with the chosen regulated ATSs to be listed and tradable. This challenge should be addressed beforehand as different tokenization platforms and ATSs have different standards and protocols – some are still being restructured or developed.

Reg. CF issuers should establish contacts with the ATS of their choice before the primary issuance to ensure that the issuer’s and platform’s configurations of digital securities match and the pre-listing procedures required by the ATS are adhered to.

Some of the ATS platforms offer all-in-one tokenization, marketing and listing services, which may simplify your task but still require an in-depth due diligence on the possible issues outlined above.

If the offering is poorly structured or documented, the Reg. CF smart contract tokens’ features may not enforceable for secondary trading, or if the security tokens are incompatible with the selected ATS, blockchain projects may be tempted by a seemingly simple technical solution – recalling the flawed security tokens and replacing them with the new ones.

However, this may not be possible or may be costly and complicated from the legal standpoint, as one cannot always simply recall the issued securities, albeit in the form of digital tokens.

Defects in a Reg. CF security tokens itself may be incurable for legal compliance purposes and may disqualify the security from being listed on a regulated trading platform.

So, getting your Reg. CF security tokens to secondary market is something to consider well in advance, or risk the loss of the digital security’s value, or even liability for violation of securities and other laws.

Regulation CF Limitations

While Regulation CF expands the options for raising funds from the American investors, it also contains certain limitations, which must be complied with to be exempt from the registration requirements, including:

  • The issuer of securities under Regulation CF must be a U.S. entity;
  • Investors are limited in the amount they are allowed to invest in proportion to their income;
  • The offering must be made only through a broker-dealer registered with SEC or a funding portal accredited with the Financial Industry Regulatory Authority (FINRA);
  • Securities purchased under Regulation CF cannot be traded on the secondary market within a year of ownership, except to family members or accredited investors.

Guiding Clients Through Every Stage of Equity Crowdfunding Under Traditional and Tokenized Reg. CF Offerings:

  • Corporate structuring for domestic and foreign issuers — incorporating a legal entity in the U.S. or creating a U.S. holding for a foreign company;
  • An appropriate token sale structure to U.S. and non-U.S. investors, including transfer restrictions and token issuance;
  • Advising on potential bottlenecks that may arise in tokenized Reg. CF offerings, e.g.,  marketing issues, taxation issues, risk of not getting listed on ATS platform after the issuance due to legal, business & tech-related issues, etc;
  • Structuring the offering and equity terms;
  • Advising on operational questions, including the work with broker-dealers, funding portals, ATS platforms and other crowdfunding intermediaries or service providers;
  • Due diligence of advertising materials and other documents published on the funding portals and the limited information that can be provided to investors outside of the funding portal;
  • Advising on opportunities for combined offering to accredited investors under Reg D and non-accredited investors under Reg CF;
  • Drafting and filing the Form C offering statement with the SEC that will include, among other things, (i) information about the company owners, directors, and officers; (ii) description of the issuer’s business; and (iii) an overview of the issuer’s financial situation and other required information.

Regulation CF Related Resources:



For more information about Regulation CF STOs,

please contact Dilendorf Law Firm by sending an email or calling us at 212.457.9797

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