How Does the Transition from a Private Sale to a Public Launch Affect Classification?
The transition from a private sale (often restricted to accredited investors under an exemption like Reg D) to a public launch significantly increases regulatory scrutiny. A private sale may be exempt from registration, but a public launch of the same token must either be registered or rely on a different exemption.
The public marketing and broader distribution of the token are key factors that regulators use to assess the "expectation of profit" and the need for investor protection.
Glossar
Public Launch
Initiation ⎊ The public launch, within cryptocurrency derivatives, options trading, and financial derivatives, signifies the formal commencement of trading activity for a newly introduced product or platform.
Transition
Equilibrium ⎊ Transition, within cryptocurrency and financial derivatives, signifies a shift in market states, often driven by evolving liquidity conditions and order flow dynamics.
Private Sale
Funding ⎊ The Private Sale is a crucial early-stage Funding mechanism where a crypto project raises capital from a curated group of sophisticated investors, preceding any public offering.