What Regulatory Exemptions Allow Security Tokens to Be Sold without Full Registration?

Security tokens, like traditional securities, can be sold without full SEC registration by utilizing specific regulatory exemptions. The most common include Regulation D (Rules 506(b) and 506(c)) for private placements to accredited investors, Regulation A (often called "mini-IPO") for smaller public offerings, and Regulation S for offerings made outside the United States.

These exemptions provide a streamlined path to capital raising but impose strict requirements regarding investor eligibility, disclosure, and offering size limits.