What Regulatory Challenges Might a Reverse ICO Face Compared to a Traditional Securities Offering?

The primary challenge is the uncertainty surrounding the token's classification ▴ is it a utility token or an unregistered security? Unlike a traditional securities offering with clear regulatory frameworks (like an IPO), the rules for tokens are still evolving globally.

Established companies face greater scrutiny due to their size and public profile. They must navigate international laws, anti-money laundering (AML) requirements, and investor protection regulations, often leading to costly compliance efforts.