01
ICO Legal Structure & Compliance
Token-sale architecture drawn around the regulatory frameworks that apply, so the structure supports the raise rather than fighting it.
Speak to this team →Legal Structuring for Token Sales
Initial Coin Offerings (ICOs)
Token sales structured for exemption or registration, with the securities-law analysis done before launch, offering documentation, smart-contract review, and the post-offering governance that keeps the record clean.
A token sale is a securities question first and a fundraising mechanic second. The test is Howey, applied to how the token is sold rather than its label, and the SEC staff's 2019 framework lists the facts that weigh most: a promoter the buyers rely on, proceeds spent building the network, and a token sold before its network exists.
The answer picks the path. A sale to accredited investors under Rule 506(c) is unlimited in size, but every buyer's status must be verified rather than merely represented. Regulation A Tier 2 raises up to $75 million from the public after the SEC qualifies the offering statement. Regulation S sells to non-US persons offshore and keeps the tokens there for up to a year. Each path fixes who may buy, what they must be told and how long they must hold. We have advised in the digital-asset space since 2014, among the first U.S. firms to counsel funds and platforms in the category, and have represented clients in matters before the SEC and the IRS. The agencies have their own lawyers; we act for the companies in front of them.
What We Do
ICO counsel from the securities analysis that determines if you can launch, through the documentation and code review, to the obligations that persist after close.
02
Token-Sale Documentation & Agreements
Whitepapers, terms of sale, and subscription and investor agreements drafted to give buyers the information they need while protecting the issuing entity from avoidable liability.
Speak to this team →03
Securities-Law Analysis for Token Offerings
Analysis conducted before launch to determine if the offering qualifies for an exemption from registration or requires full SEC registration. That determination drives the whole structure.
Speak to this team →04
Form D, Blue Sky & Bad-Actor Checks
The Form D within 15 days of the first sale, the state notice filings that follow it, and the Rule 506(d) bad-actor questionnaire for every covered person, so the exemption is not lost on paperwork.
Speak to this team →05
Investor Protection & Disclosure
Disclosure calibrated to the offering and the audience, accredited or retail, domestic or international, because the rules and the required information change with each.
Speak to this team →06
Smart-Contract Legal Review
Legal review of the contracts that govern token distribution, vesting, and automated compliance, because coding errors or thin legal protections can become regulatory violations.
Speak to this team →07
SAFTs & Token Warrants
Simple agreements for future tokens, token warrants attached to an equity round and the side letters between them, drafted so the promised supply, the vesting and the delivery mechanics match the allocation schedule.
Speak to this team →08
Post-ICO Compliance & Governance
The obligations that survive the close, meaning continued securities, tax, and regulatory compliance, plus the reporting and corporate-governance structures the offering leaves behind.
Speak to this team →What you should know
The recurring fault lines in token offerings. Read these before you publish a whitepaper or open a sale.
01
Howey has four elements and the fourth decides
An investment of money in a common enterprise, with an expectation of profit derived from the efforts of others. Token buyers usually satisfy the first three by paying, so the analysis turns on the fourth: whether the network runs without the promoter, or whether its value still depends on the team spending the proceeds.
02
The 2019 framework names the facts that matter
The SEC staff's April 2019 framework weighs reliance on an active participant, a token sold before its network works, and proceeds spent building or marketing that network. The same framework allows a token to stop being a security once the network no longer depends on the promoter, a conclusion the record has to earn.
03
The whitepaper is an offering document
Anything said to sell the token can be a material statement, including a roadmap, a staking yield or a founder's post. Rule 10b-5 does not care which document it appeared in. The whitepaper, the terms of sale and the subscription agreement are drafted as one package, and the marketing is checked against it.
04
Rule 506(c) buys reach at the price of verification
General solicitation is permitted under Rule 506(c), so the sale can be advertised, but every purchaser must be an accredited investor whose status the issuer verified. SEC staff said in March 2025 that a large minimum investment plus written representations can be reasonable verification, which spares the issuer from collecting tax returns.
05
Regulation S keeps the tokens offshore, for a while
A Regulation S sale is made to non-US persons in an offshore transaction with no directed selling efforts in the United States. For equity-like tokens of a non-reporting issuer, the distribution compliance period runs one year, during which resales into the US are restricted and the token contract has to enforce the restriction.
06
Restricted tokens have a holding period
Tokens bought in an exempt sale are restricted securities. Rule 144 lets a non-affiliate resell after six months if the issuer files Exchange Act reports and after a year if not; affiliates face volume limits on top. Listing the token on a venue before the period ends is a distribution the exemption did not cover.
The arc of a token sale
How this work runs
From Howey memo to the block that closes the raise.
- Stage 01
Characterization
Before a line of the whitepaper is public, the token is run through the Howey framework on how it is structured, distributed, and used, because that analysis decides if this is a utility sale or a securities offering, and everything downstream inherits the result.
- Stage 02
Exemption Architecture
The raise is mapped onto a registration or exemption path, which settles who may be solicited, accredited or retail, domestic or offshore. The entity, lockups, and marketing perimeter are then shaped to the path chosen rather than retrofitted after the announcement.
- Stage 03
Paper Meets Code
Whitepaper, terms of sale, and subscription agreements are drafted in parallel with legal review of the smart contracts that actually move the tokens, covering distribution, vesting, and automated compliance, so the code performs exactly what the disclosures promise.
- Stage 04
Sale & the Long Tail
The sale opens inside the guardrails: investor verification, disclosure delivery, and required regulatory filings on schedule. After close, the securities, tax, and governance obligations persist, and the record is kept clean enough to survive a regulator's later look.
The whitepaper markets the token. The Howey memo decides if you may sell it.
15 days
to file Form D after the first sale in a Regulation D exempt offering
Frequently asked
The questions founders and issuers ask first about structuring a token sale.
Is my token sale a securities offering?+
It depends on how the token is structured, distributed, and used. The same instrument can read as a utility token on one analysis and as a security on another, and that determination drives the entire offering. We conduct a securities-law analysis before launch to establish if the sale qualifies for an exemption from registration or requires full SEC registration.
What documentation does a compliant ICO require?+
A disclosure document, whether called a whitepaper or an offering memorandum, that sets out the token's rights, the use of proceeds and the team's own allocation and vesting, with the risk factors a court would expect to see; a token purchase or subscription agreement carrying the investor's representations; and the file showing how accredited status was verified where Rule 506(c) is used. A Regulation A offering uses a Form 1-A the SEC qualifies before any sale. The Form D for a Regulation D sale is filed within 15 days of the first sale, and the state notice filings follow it.
Do disclosure rules differ for accredited and retail investors?+
Yes. Rule 506(b) and 506(c) sales to accredited investors carry no prescribed disclosure, only the antifraud rules, which is why the offering memorandum is still written carefully. A 506(b) sale that includes even one non-accredited investor triggers the information requirements of Rule 502(b), which approach those of a registered offering. Retail participation at scale means Regulation A, with a qualified Form 1-A and ongoing reports, or Regulation Crowdfunding, capped at $5 million in a twelve-month period through a registered intermediary. Outside the United States the local regime applies in addition, not instead.
Do the smart contracts behind a token sale need legal review?+
They do, because the code is a term of the offering. If the sale contract mints more tokens than the whitepaper disclosed, vests the team's allocation on a different schedule, or lets tokens transfer during a period the exemption says they cannot, the disclosure is false the moment the contract deploys. We read the contract against the documents, confirm the transfer restrictions and lockups are enforced on chain, and make sure an upgrade key, if one exists, is disclosed and governed. A third-party security audit covers exploits. It does not cover promises.
What obligations continue after the token sale closes?+
Resale restrictions first: tokens sold in an exempt offering are restricted securities under Rule 144, with a six-month or one-year holding period depending on whether the issuer files Exchange Act reports. If the token is a security and comes to be held of record by 2,000 persons while the issuer has more than $10 million in assets, Section 12(g) registration and periodic reporting can follow. Regulation A Tier 2 issuers file annual and semiannual reports regardless. On the tax side, a token sale is generally treated as a sale of property, and the proceeds are income to the issuer with little or no basis to offset them, so the treasury is planned before the sale rather than explained after it.
Related
A token offering rarely sits alone. The sibling digital-asset disciplines it draws on most.
Cryptocurrency & the SEC
Token classification, registration and exemption analysis, and securities-law compliance, including representation in matters before the SEC where enforcement is in play.
Cryptocurrency & the SEC →Regulatory Issues & Compliance
The federal and state frameworks an offering must read together, from money transmission and securities to tax reporting and AML, folded into a compliance program that can move with the rules.
Regulatory Issues & Compliance →Corporate Structure in the Crypto Space
The entity and governance spine behind a token project, covering formation, multi-jurisdictional planning, and structures that accommodate offerings while meeting regulatory obligations.
Crypto Corporate Structure →Licensing & IP for Digital Assets
Trademark, patent, trade-secret, and licensing strategy for the technology and the brand behind a token, with protection across the jurisdictions where it is used.
Licensing & IP →← Back to all Digital Assets practices
Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice