Regulation D

Regulation D is the set of SEC rules that let an issuer sell securities in the United States without registering the offering. Almost every US token private round runs on Rule 506, which comes in two forms. Rule 506(b) bans general solicitation and allows up to 35 non accredited but sophisticated purchasers. Rule 506(c) permits public advertising but requires every purchaser to be accredited and verified. Either way the issuer files a Form D on EDGAR within 15 calendar days after the first sale, and purchasers receive restricted securities.

Choosing between 506(b) and 506(c) is a decision about what your founders may say in public, and most teams make it by accident. One post about the raise forecloses 506(b), which means the round either accepts documentary verification of every purchaser or has no exemption at all.

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The clock in step four runs from the first sale rather than from the close, which is the detail worth putting in a calendar before the round opens.

What Regulation D exempts, and from what

Rule 506 is a safe harbor under Section 4(a)(2) of the Securities Act, the statutory private offering exemption.¹ What it exempts is the registration of the offering. It does not exempt anything from the antifraud provisions, it does not change what the instrument is, and it does not make the securities freely tradable afterwards.

That last point is the one founders skip. Purchasers in a Rule 506 offering receive restricted securities, so resale is limited until Rule 144 conditions are met or another exemption applies.² A cap table full of restricted holders is the normal outcome of a clean round, not a sign something went wrong.

506(b): no solicitation, some room for non accredited buyers

Rule 506(b) permits no general solicitation and no general advertising. In exchange it allows an unlimited number of accredited investors plus up to 35 non accredited but sophisticated purchasers, and it lets the issuer rely on a reasonable belief about accredited status rather than on documents.¹

The non accredited allowance is less useful than it looks. Including any non accredited purchaser triggers additional disclosure obligations, which in practice means producing something close to registration style information for that tranche. Most issuers take the accredited only path and keep the disclosure burden down.

506(c): advertise, but verify every purchaser

Rule 506(c) inverts both terms. General solicitation and advertising are permitted, provided all purchasers are accredited investors and the issuer takes reasonable steps to verify their status, with the other Regulation D conditions satisfied.² In practice verification means reviewing tax returns, W-2s, bank or brokerage statements or credit reports, or accepting a written confirmation from a lawyer, accountant or broker dealer. A signed self certification alone does not meet the standard.

Both safe harbors are also subject to the bad actor disqualification provisions in Rule 506(d), which can remove the exemption entirely based on the covered persons involved rather than on anything about the offering itself.¹ That is a diligence item on your own team and your placement agents, and it is worth running before the first meeting rather than after.

Form D, and the fifteen day clock

An issuer relying on either safe harbor does not register the offering, but must file a Form D notice electronically through EDGAR within 15 calendar days after the date of first sale of securities in the offering.³ The clock starts at the first sale, not at the final close, and getting EDGAR credentials issued is itself a lead time item.

The filing is short and public. Anyone can read a Form D, which means the raise stops being confidential fifteen days after the first wire clears. Teams planning an announcement sequence should build around that rather than be surprised by it.

What Reg D settles for a token round, and what it does not

It settles how the raise happens lawfully without registration. It settles nothing about whether a token delivered at the end of that raise is itself being sold in a securities transaction. That is a separate Howey analysis on a separate transaction, and it is worked through on the Howey test and SAFT pages. A clean Form D file and an unexamined delivery eighteen months later is the single most common gap we see.

For the offshore leg of the same raise, Regulation S provides a different safe harbor with its own conditions, and the two are usually run side by side. Whether a specific offering qualifies for any exemption is fact specific and jurisdiction specific, and that call belongs to your counsel. This page is reference material for structuring work. It is not legal advice, and it is not a recommendation to buy, sell, or hold any asset.

Common questions

What is the difference between Rule 506(b) and Rule 506(c)?

Rule 506(b) bans general solicitation and advertising, allows unlimited accredited investors plus up to 35 non accredited but sophisticated purchasers, and lets the issuer rely on a reasonable belief about accredited status.¹ Rule 506(c) permits public solicitation but requires every purchaser to be accredited and requires the issuer to take reasonable steps to verify it with documents rather than a self certification.²

When is a Form D due?

Within 15 calendar days after the date of first sale of securities in the offering, filed electronically through EDGAR.³ The clock runs from the first sale rather than from the final close, so a round that closes in tranches has its deadline set by the earliest one. The filing is public, which means the raise becomes visible fifteen days after the first sale.

Are securities bought under Regulation D restricted?

Yes. Purchasers in a Rule 506 offering receive restricted securities, so resale is limited until the conditions of Rule 144 are satisfied or another exemption applies.² Regulation D exempts the offering from registration; it does not make the resulting securities freely tradable. Any secondary transfer needs its own analysis, and in a token structure that includes transfers on a blockchain.

See Token Launch Strategy and Round Structure for how this applies in practice.

Sources

17 CFR 230.506, Regulation D safe harbors 506(b) and 506(c)
Legal Information Institute, Cornell Law School, 2026
Binding rule text. The Section 4(a)(2) safe harbor, the solicitation ban and 35 purchaser limit under 506(b), the verification condition under 506(c), and the bad actor disqualification provisions in 506(d).
General Solicitation, Rule 506(c), Exempt Offerings
U.S. Securities and Exchange Commission, 2026
Current SEC guidance confirming that all purchasers must be accredited, that the issuer must take reasonable steps to verify, that purchasers receive restricted securities, and that a Form D is due within 15 days of the first sale. The sec.gov host rejects automated clients; the page is live.
17 CFR 230.503, Form D filing requirement
Legal Information Institute, Cornell Law School, 2026
Binding rule text. Form D must be filed electronically within 15 calendar days after the date of first sale in the offering.

Last reviewed 2026-08

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