Requirements for Exemption Under Regulation S
In general, U.S law requires securities (such as at least some virtual tokens) to be registered with the government before they can be offered or sold. However, the law provides for some exemptions from registration in certain circumstances. Regulation S exempts offers and sales of securities that occur outside of the United States.
Specifically, Rule 903 of Regulation S provides an exemption when an offer or sale is made in an offshore transaction, and no directed selling efforts are made in the United States. An offshore transaction is generally one in which the offer is not made to a person in the U.S, and the buy order originates when the buyer is outside the United States.
Fortunately, although Rule 903 prohibits directed efforts in the United States, an international offering under Regulation S can be coupled with a U.S offering exempt from registration under Regulation D.
Comprehensive Legal Services for Token Sales Under Regulation S
Dilendorf & Khurdayan provides comprehensive legal services throughout an offering under Regulation S.
Our services include:
- Reviewing our clients’ planned token sales and advising them on applicable U.S. laws, including qualifying offshore transactions for the Regulation S exemption
- Drafting detailed offering memoranda and purchase agreements to make clear who is eligible to participate and what U.S restrictions apply to the virtual tokens
- Assisting clients in conducting appropriate Anti-Money Laundering and Know Your Customer screening of prospective purchasers, ensuring that purchasers are who and where they claim to be
- Structuring a simultaneous offering within the United States under Regulation D or another applicable exemption from registration
Contact Us to Learn More About Our Regulation S Services for Token Sales
Send us an email or call 212.457.9797 to schedule a consultation at our Manhattan office.