Summary (from Quora https://www.quora.com/How-do-you-register-an-ICO-with-the-SE...):
| The easiest way to make an initial coin offering compliant with the SEC is to file an exemption under Rule 506 of Regulation D.
| Reg. D section 506b allows you to raise money from up to 35 non-accredited and unlimited accredited investors, however you cannot advertise.
| Reg. D, section 506c allows you to advertise, but only raise money from accredited investors and they must provide evidence or 3rd party verification of being accredited.
| These are both great options, but unfortunately they limit your ability to raise capital from non-accredited investors, which is a significant advantage and source of capital for ICO’s.
| On April 5, 2012, President Obama signed a landmark piece of bi-partisan legislation called The JOBS Act into law. The JOBS Act greatly expanded entrepreneurs’ access to capital, allowing them to go to the crowd and publicly advertise their capital raises.
| Included in the JOBS Act was Regulation A+ which allows the public to invest up to $50M, in a 12 month period, in private companies. This allows startups to use Reg A+ to turn their customers into investors.
| Before committing to a Reg. A+ offering, companies are permitted to “test the waters”. This enables companies to gauge the potential success of a Reg. A+ offering and make an educated decision on whether or not to move forward prior to spending time and money on the SEC approval process. Testing the waters can be a low cost and simple way to make sure a Reg. A+ offering makes sense for an ICO.
| Because of the costs associated with conducting a Reg A+ offering, it’s most likely not worth it for offerings under $3 million.
| In my opinion, Reg. A+ is the perfect middle ground for companies looking to launch an ICO that’s compliant with the SEC, but also available to the general public.