Investment and offering rules for crypto projects raising capital across key markets

INTRODUCTION

Crypto projects can receive investor value as fiat currency, stablecoins, other cryptoassets or rights recorded onchain. Across the jurisdictions covered here, classification generally follows the arrangement’s economic substance rather than labels including “token,” “vault,” “receipt,” “non-custodial,” “decentralised” or “invitation-only.” Securities, fund and investment-services laws may apply when a person contributes value for rights to profits, yield, income, assets or net asset value that depend materially on a promoter, manager or curator.

Several regulatory questions can arise at the same time. A token may be a security, fund interest, financial instrument, derivative, cryptoasset or more than one of these. The offer may require registration or may qualify for a private, institutional or offshore exemption. The issuer, manager, adviser, broker, arranger, custodian, exchange or crypto-service provider may separately require authorisation. The form of compensation paid to promoters or introducers can also affect whether their activity is regulated.

An exemption for sales to accredited, professional, institutional or qualified investors normally addresses a defined offering or disclosure requirement. Product-classification, intermediary-licensing, fund-management, investment-adviser, anti-money-laundering, sanctions, financial-promotion, custody and secondary-transfer rules can still apply. An offshore exemption turns on investor location and status, marketing activity and transfer arrangements. A “non-U.S.” label alone does not establish the exemption.

UNITED STATES

United States law has no single regulatory category or fundraising exemption for crypto projects. A token can be a security because it represents an existing security onchain. A cryptoasset that is not a security can still be offered and sold as part of an investment contract under the test in SEC v W. J. Howey Co. A token representing a pro-rata interest in the net asset value or returns of an actively managed pool is especially likely to engage securities law where investors contribute value to a common enterprise and depend on continuing managerial efforts.

Four federal regimes can apply independently. An offer or sale of a security requires Securities Act registration or an available exemption. A pooled vehicle investing in securities may be an investment company unless section 3(c)(1), section 3(c)(7) or another exclusion applies. A person selecting securities or managing the pool may be an investment adviser. Performance-based compensation can also engage the qualified-client rules. A person regularly soliciting investors or helping effect transactions for outcome-linked compensation may be acting as an unregistered broker. Compliance with one regime does not resolve the others.

Open promotion, unrestricted access, permissionless token transfers and an inability to identify beneficial owners can be incompatible with private-offering conditions, offshore-sale restrictions and private-fund ownership limits. Onchain transferability does not displace those requirements.

Howey investment-contract test

The binding law remains SEC v W. J. Howey Co., 328 U.S. 293 (1946). An investment contract is a contract, transaction or scheme involving an investment of value in a common enterprise, with a reasonable expectation of profits derived from the efforts of others. Courts classify the entire economic arrangement rather than the token or contract name. “Money” is understood economically and includes cryptoassets contributed as value.

Howey asks whether the buyer contributes value to a shared venture for a return that depends materially on another person’s management. An investor need not be completely passive. The relevant issue is whether a promoter’s or manager’s essential entrepreneurial or managerial efforts drive success.

Where investors transfer a stablecoin or another cryptoasset into a pooled arrangement, that transfer is an investment of value. A common pool, common net asset value and shared gains and losses can establish commonality. Yield, appreciation or performance-based economics can evidence an expectation of profit. Strategy selection, allocation, service-provider selection, valuation and redemption decisions can constitute the managerial efforts of others.

The SEC’s March 2026 crypto interpretation

Securities and Exchange Commission Release 33-11412 and Exchange Act Release 34-105020 became effective on 23 March 2026. The Commission adopted the interpretation, and the Commodity Futures Trading Commission stated that it will administer the Commodity Exchange Act consistently with it. The releases do not amend a statute, bind courts as precedent or replace Howey. They supersede the SEC staff’s 2019 digital-asset analysis.

The Commission divides cryptoassets into several categories. A “digital commodity” derives value from the programmatic operation of a functional crypto system and supply and demand. It carries no intrinsic rights to passive yield, future income, profits or assets. Digital tools and collectibles principally provide use or consumption, while some payment stablecoins can be non-securities. A “digital security” represents a security onchain, and technology or labels leave the underlying rights unchanged. The Commission specifically identifies tokens entitling holders to economic distributions from a centrally managed enterprise as digital securities.

A non-security cryptoasset can still be sold as part of an investment contract where the issuer, its affiliate, agent or promoter induces investment in a common enterprise through contemporaneous promises of essential managerial efforts from which purchasers reasonably expect profits. Websites, social media, white papers, agreements and direct communications all matter. Detailed promises about personnel, strategy, resources, project targets and returns carry more weight than vague aspirations.

The Commission also describes when a non-security token can separate from an associated investment contract. Separation can occur after promised essential efforts are completed or permanently abandoned and purchasers no longer reasonably expect them. Secondary sales remain securities transactions while the connection persists. Separation does not erase an earlier violation. The doctrine is unlikely to apply while the token continues to convey net-asset-value, income or yield rights and essential managerial work continues.

Securities Act issuer exemptions

Section 4(a)(2)

Section 4(a)(2) exempts an issuer transaction “not involving any public offering.” It has no numerical fundraising ceiling and no federal notice filing, but the boundary is judicial and fact-specific. Relevant factors include purchaser sophistication or ability to bear the risk, access to information comparable to registration disclosure, and acquisition without a public-distribution plan. General advertising is ordinarily inconsistent with the route. The securities are restricted, and state-law exemptions must be identified separately.

Regulation D, Rule 506(b)

Rule 506(b) permits an unlimited amount to accredited investors and no more than thirty-five non-accredited purchasers during a ninety-day period. Each non-accredited purchaser, alone or with a representative, must have sufficient financial knowledge and experience. Prescribed disclosure and financial statements are required if any such purchaser participates. General solicitation is prohibited. The securities are restricted, and the issuer must take reasonable measures against redistribution. Form D is generally due within fifteen days after the first sale. Rule 506(d) disqualifies offerings involving specified bad actors. States retain notice, fee and antifraud authority even though substantive state registration is pre-empted.

Rule 506(b)’s legal condition is the absence of general solicitation. A pre-existing substantive relationship is one recognised and often persuasive means of demonstrating compliance, but it is not an exclusive statutory prerequisite. A targeted introduction by a third party remains a facts-and-circumstances question; an eligibility checkbox or sophistication screen alone does not create a substantive relationship. Other regimes, including private-fund and performance-fee rules, may impose higher investor thresholds than Rule 506(b).

Regulation D, Rule 506(c)

Rule 506(c) permits broad solicitation if every purchaser is accredited and the issuer takes reasonable steps to verify that status. For natural persons, the principal tests cover net worth above USD 1 million excluding the primary residence. Income can also qualify at more than USD 200,000 individually or USD 300,000 jointly in each of the two prior years, with the same-current-year expectation. Specified professional credentials provide another route. Entity categories include regulated financial entities, qualifying knowledgeable entities, entities with more than USD 5 million of assets or investments, and entities all of whose equity owners are accredited. Objective verification and records are required; a bare representation is insufficient.

Rule 506(c), unlike Rule 506(b), accommodates public solicitation. It leaves the investment-company qualified-purchaser test, the investment-adviser qualified-client test and broker registration unresolved. SEC staff stated in July 2026 that reliable programmatic attestations can support verification for tokenised securities if adequate records are retained. The statement is staff interpretation and lacks the force of a Commission rule.

Regulation S

Regulation S is a safe harbour from Securities Act section 5 for offshore offers and sales. Rule 903 requires an offshore transaction, no directed selling efforts in the United States by the issuer, distributor, affiliates or persons acting for them, and compliance with Category 1, 2 or 3 conditions.

An offshore transaction requires that the offer not be made to a person in the United States and that the buyer be outside the United States when its order originates, or that the seller reasonably believes so. Residence, organisation and beneficial-account status principally determine whether a person is a “United States person.” Citizenship alone does not control. Regulation S has no “Non-U.S. institution” category, and that label cannot establish an offshore transaction.

Category 1 has no additional distribution conditions where the issuer reasonably believes there is no substantial United States market interest in the class or the transaction qualifies as an overseas-directed offering. Category 2 generally covers equity of a reporting foreign issuer and debt of reporting or non-reporting foreign issuers and includes offering restrictions and a forty-day distribution-compliance period. Category 3 is residual. Equity ordinarily carries a one-year distribution-compliance period, reduced to six months for a reporting issuer, with purchaser certifications, resale agreements and transfer-refusal procedures; debt generally carries forty days.

A continuous open-ended token offering can create a timing problem because the distribution-compliance period may not begin until the distribution ends. Permissionless transfers may also be incompatible with certifications, legends, purchaser agreements and transfer-refusal procedures. Establishing compliance can therefore depend on reliable holder, beneficial-owner and transfer records.

Rule 152’s integration provisions permit concurrent Regulation S and Regulation D offerings. Each communication and sale must independently satisfy the applicable conditions. Concurrent structures generally use distinct communications, investor populations, portals, legends and records.

Rule 504 and other issuer routes

Rule 504 permits up to USD 10 million in a rolling twelve months. It usually prohibits general solicitation and produces restricted securities, except in specified state-registered or state-exempt offerings. Form D, bad-actor rules and state registration remain. Its USD 10 million limit, state-law exposure and usual solicitation restriction distinguish it from Rule 506.

Regulation A permits a qualified public offering of up to USD 20 million in Tier 1 or USD 75 million in Tier 2, with Form 1-A review, financial statements and, for Tier 2, ongoing reporting and investment limits. It is limited to issuers organised and principally based in the United States or Canada, and an issuer required to register under the Investment Company Act is ineligible.

Regulation Crowdfunding permits up to USD 5 million over twelve months through one registered broker-dealer or funding portal, with Form C disclosure, purchaser limits, annual reporting and a one-year resale restriction. A non-United States issuer and an investment company are ineligible.

Section 4(a)(5) provides a limited issuer exemption for no more than USD 5 million sold solely to accredited investors without advertising, subject to restricted-security and state-law conditions. Intrastate section 3(a)(11), Rules 147 and 147A, employee-benefit Rule 701, issuer-exchange section 3(a)(9) and court- or agency-approved exchange section 3(a)(10) are transaction-specific. They do not constitute a general exemption for crypto fundraising.

Resales and the conflict with a freely transferable token

An onchain transfer is still an offer or sale. Restricted securities do not become freely resalable because a smart contract permits the movement. The market’s “section 4(a)(1½)” doctrine is not a statute or Commission safe harbour; it combines the non-issuer, non-underwriter and non-dealer concept with private-placement protections and ordinarily requires a sophisticated purchaser, issuer information, no solicitation, investment intent and transfer restrictions.

More defined routes include section 4(a)(7), for specified private resales to accredited investors without general solicitation and with issuer information and seasoning conditions; Rule 144, with holding-period, public-information and affiliate conditions; Rule 144A, for resales to qualified institutional buyers, generally institutions owning and investing at least USD 100 million in unaffiliated securities; and Regulation S Rule 904 for qualifying offshore resales. None is self-executing on a permissionless token.

Broker, finder and paid-distribution perimeter

Exchange Act section 3(a)(4)(A) defines a broker as a person engaged in the business of effecting securities transactions for the account of others. Section 15(a) generally prohibits an unregistered broker from inducing or attempting to induce a purchase or sale. Relevant facts include solicitation, negotiation, transaction participation, repetition, handling funds or securities, and compensation based on transaction outcome or size. Transaction-based compensation is a strong indicator, although the complete activity controls.

Compensation per completed investment or deployment is directly tied to a transaction and is a strong broker indicator where a third party solicits investors or helps close investments. Compensation per meeting is one step removed but can remain relevant where the third party regularly identifies, qualifies or persuades prospects for a specific investment product. A fixed retainer removes the clearest transaction-compensation indicator but does not alter the regulatory character of solicitation, recommendations, negotiation or order handling. An existing success-fee contract has no grandfathering effect under the broker rules.

As at the research date, the Commission had not adopted a general federal “finder” safe harbour. The Small Business Capital Formation Advisory Committee’s February 2026 recommendation and the March 2026 rulemaking petition have no legal force. State finder provisions cannot remove the federal broker requirement.

Rule 3a4-1 gives a narrow, non-exclusive issuer-personnel safe harbour. Among other matters, the associated person cannot receive transaction commissions, cannot be associated with a broker-dealer, and must fit limited-sales, substantial-other-duties or passive-response conditions. It generally does not protect an independent distribution intermediary.

Rule 15a-6 provides conditional relief for a foreign broker or dealer that is regulated and operating abroad. It covers specified unsolicited transactions, qualifying research, solicited institutional transactions through a registered United States chaperoning broker-dealer, and certain dealings with regulated institutions or foreign persons. It is not an exemption for an otherwise unregulated contractor and does not replace an issuer exemption.

In April 2026, Trading and Markets staff issued a five-year no-objection position for narrowly designed self-custodial interfaces. The interface must remain neutral: users set parameters; routing is objective; there is no recommendation, discretion, custody, execution, settlement or handling of funds; and any user-paid fee is objective and product-, venue- and counterparty-agnostic. The position is staff-only, addresses Exchange Act section 15 and has no legal force. An interface that is specific to one investment product, is paid by the product operator or is connected to managed allocation may fall outside the staff position.

Investment Company Act vehicle classification

Section 3(a)(1) generally covers an issuer that is or holds itself out as principally engaged in investing, reinvesting or trading securities, or owns or proposes to acquire investment securities exceeding forty per cent of its unconsolidated assets excluding government securities and cash items. Applying the test requires identification of the issuer, whether a company, pooled arrangement, smart-contract vehicle or another person. It also requires classification of every portfolio position. A stablecoin’s non-security status alone does not keep the vehicle outside the Investment Company Act; notes, tokenised securities, securities receipts and other yield positions can bring it within the statute.

Section 3(c)(1) excludes an issuer with no more than one hundred beneficial owners that does not make or presently propose a public offering. Look-through and attribution rules apply. A 250-owner variation applies only to a qualifying venture-capital fund under Rule 3c-7. That fund must have no more than USD 12 million in aggregate capital contributions and uncalled committed capital. An ordinary yield vehicle cannot use the variation. Free transferability and incomplete beneficial-owner records can make compliance with the one-hundred-owner limit difficult to establish.

Section 3(c)(7) excludes an issuer not making or proposing a public offering whose outstanding securities are owned exclusively, at acquisition, by qualified purchasers. A qualified purchaser is generally an individual or family-owned company owning at least USD 5 million in investments, or an institution or other qualifying person owning and investing at least USD 25 million on a discretionary basis. Certain knowledgeable employees can participate under Rule 3c-5. These qualified-purchaser thresholds exceed accredited-investor thresholds.

Section 3(c)(7) has no one-hundred-owner cap, although Exchange Act holder-registration thresholds still apply. Congress provides that compliant Rule 506 general solicitation alone does not make a section 3(c)(1) or 3(c)(7) fund public. For a United States domestic fund, the holder tests apply across the fund. Longstanding SEC staff positions recognise that a non-United States fund conducting a genuine offshore public offering may make a segregated private United States offering. Generally, only United States-resident beneficial owners count toward section 3(c)(1). United States-resident purchasers must be qualified purchasers under section 3(c)(7). Non-United States-resident holders need not satisfy that test. The staff position depends on genuine offshore/onshore separation, private United States offers, transfer controls and an absence of anti-evasion facts.

Rule 506(c) and section 3(c)(7) can operate together with properly separated Regulation S sales. The U.S. offering would then be limited to verified accredited investors who are also qualified purchasers, with effective transfer controls. Treatment of offshore holders depends on the foreign-fund structure, genuine separation of the offerings and the applicable staff positions.

Section 7(d) generally prevents a foreign investment company from publicly offering in the United States without a Commission order. A private United States offering through section 3(c)(1) or 3(c)(7) remains possible if every condition is satisfied.

Investment advisers and performance compensation

Advisers Act section 202(a)(11) generally covers a person who, for compensation and as a business, advises others about the value of securities or the advisability of acquiring or selling them. Every person that selects, recommends or reallocates securities for compensation requires a functional analysis, regardless of labels including “research,” “commercial,” “independent curator” or “non-discretionary.”

Potential federal registration exemptions include the foreign-private-adviser route, requiring no United States place of business, fewer than fifteen United States clients plus United States investors in advised private funds, less than USD 25 million attributable to them, no United States public holding out and no registered investment-company or business-development-company client. Rule 203(m)-1 differs by adviser location. A United States-based adviser must advise solely qualifying private funds and manage less than USD 150 million of private-fund assets. A non-United States adviser must have no United States-person client other than qualifying private funds, and any assets managed at a United States place of business must be solely private-fund assets with total value below USD 150 million. The private-fund-adviser exemption can create exempt-reporting-adviser status rather than complete non-regulation. A venture-capital-adviser route generally does not fit an actively managed yield strategy. State registration rules can apply even where SEC registration does not.

Section 205(a)(1) generally prohibits a registered or required-to-register adviser from charging compensation based on gains or appreciation unless an exemption applies. Rule 205-3 permits performance fees for a qualified client. SEC Order IA-6961, effective 29 June 2026, increased the principal thresholds to at least USD 1.4 million under management with the adviser immediately after contracting, or a reasonable belief that the client has more than USD 2.7 million net worth immediately before contracting. Qualified purchasers and certain knowledgeable employees have separate routes.

A performance allocation based on gains or appreciation is performance compensation. A section 3(c)(1) fund generally requires a look-through to each equity owner for Rule 205-3. A section 3(c)(7) structure limited to qualified purchasers may also satisfy some qualified-client routes, although the tests remain legally distinct. State performance-fee rules remain separate.

If a registered adviser has custody of client funds or securities, Rule 206(4)-2 generally requires qualified-custodian and verification safeguards, subject to an audited-private-fund alternative. Onchain or self-custodial terminology is not decisive where a person can move, direct or control assets.

Commodity Exchange Act and CFTC carve-outs

A non-security cryptoasset can still be a commodity under the Commodity Exchange Act. The Commodity Futures Trading Commission has principally antifraud and antimanipulation authority over spot commodity markets. Registration becomes much more direct where a vault uses futures, options, swaps, perpetuals, leveraged retail commodity transactions or other commodity interests.

A commodity pool operator solicits or accepts funds for a pool trading commodity interests; a commodity trading adviser advises for compensation about them. A strategy limited to spot cryptoassets or stablecoins that are not commodity interests and ordinary lending is not automatically a commodity pool. Any position embedding a derivative or leverage requires a fresh analysis.

Rule 4.13(a)(3) provides a de minimis commodity-pool-operator exemption for a privately offered pool limited to specified sophisticated or non-United States participants. The pool must meet either a five per cent initial-margin and premium test or a one-hundred-per-cent aggregate net-notional test. The operator must file notice no later than delivery of a subscription agreement. It must affirm or withdraw the exemption annually within sixty days after calendar year-end, amend inaccurate or incomplete information within fifteen business days, retain required records for five years and answer Commodity Futures Trading Commission special calls. Rule 4.7 reduces disclosure, reporting and recordkeeping duties for registered operators and advisers whose participants are qualified eligible persons. Registration remains required. Commodity Exchange Act section 4m and Rule 4.14 contain narrower commodity-trading-adviser exemptions. Retail financed commodity transactions with non-eligible-contract-participants can be regulated as futures unless actual delivery occurs within twenty-eight days.

FinCEN, sanctions and state money transmission

Financial Crimes Enforcement Network guidance treats a person engaged as a business in issuing and redeeming convertible virtual currency as an administrator, and a person exchanging it for currency, funds or other convertible virtual currency as an exchanger. An administrator or exchanger that accepts and transmits value, or buys and sells virtual currency as a business, is generally a money transmitter. It is also a money-services business unless a limitation applies.

FinCEN’s classification depends on the functions performed. Relevant limitations include using virtual currency only to buy or sell one’s own goods or services and transmission integral to a bona fide transaction other than money transmission. Sending customer value to a third party outside that transaction can defeat the limitation. An arrangement that accepts stablecoins, issues and redeems tokenised interests and sends value to third-party strategies can require a U.S.-nexus money-transmitter analysis. The functions and U.S. nexus determine whether federal registration, an anti-money-laundering programme, suspicious-activity reporting, recordkeeping and a U.S. agent are required. State money-transmitter and virtual-currency licensing remains separate.

FinCEN postponed the anti-money-laundering rule for registered investment advisers and exempt reporting advisers until 1 January 2028. Adviser status alone therefore does not trigger the rule on the research date. A separate money-transmitter, broker-dealer, bank or futures status can independently impose Bank Secrecy Act duties.

Office of Foreign Assets Control rules apply to virtual currency as they do to fiat. United States persons must block prohibited property and interests; civil penalties can be strict-liability. Non-United States persons can be exposed through United States persons, property, evasion or secondary-sanctions rules. Applicable sanctions obligations can include screening customers, beneficial owners, wallets, geography and entities owned fifty per cent or more by blocked persons; monitoring transactions; blocking prohibited property; and timely reporting.

Stablecoins, exchanges, ERISA and continuing antifraud liability

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, was enacted on 18 July 2025. Once operative, it excludes a payment stablecoin issued by a permitted issuer from the securities definition and prohibits the issuer from paying interest or yield solely for holding that payment stablecoin. It becomes effective on the earlier of 18 January 2027 or 120 days after the primary federal regulators issue final implementing regulations. As at 25 August 2026 the located implementation measures remained proposals, so the fixed January 2027 date had not yet been displaced. The SEC’s March interpretation separately treats specified fully reserved, par-redeemable covered stablecoins as non-securities under Howey.

Payment-stablecoin treatment does not extend automatically to a separate token that carries net-asset-value, income or yield exposure. The classification of the asset used to subscribe does not determine the classification of the investment received.

A system that brings together orders in securities and uses established, non-discretionary methods for agreement can be an exchange under Exchange Act section 3(a)(1) and Rule 3b-16. A decentralised exchange, automated market maker or interface supporting trading in such a token requires separate exchange or alternative-trading-system analysis. The SEC withdrew its 2022 proposal to broaden the exchange definition in June 2025; the existing test controls.

Exchange Act section 12(g) can require issuer registration where total assets exceed USD 10 million and a class is held of record by at least 2,000 persons or 500 non-accredited investors, subject to exemptions and foreign-private-issuer rules. Section 3(c)(7)’s lack of a one-hundred-owner cap does not remove section 12(g).

Employee-benefit plans create another investor test. If benefit-plan investors own twenty-five per cent or more of a class, the underlying assets can become plan assets and the manager can become an Employee Retirement Income Security Act fiduciary. “Benefit plan investor” includes plans subject to Part 4 of that Act, individual retirement accounts and other plans subject to Internal Revenue Code section 4975, and entities whose underlying assets already include plan assets. Manager, adviser and affiliate holdings are disregarded in the denominator. Plan ownership and secondary transfers therefore remain legally relevant throughout the life of the vehicle.

Every exempt sale remains subject to Securities Act section 17(a), Exchange Act section 10(b) and Rule 10b-5. A misstatement or material omission in a website, message, deck, return report or onboarding record can create liability. An unregistered non-exempt sale can lead to rescission, injunctions, disgorgement, penalties, bars, bad-actor disqualification, state claims and, for wilful conduct, criminal prosecution. Later token “separation” under the 2026 interpretation does not erase earlier liability.

Effective and proposed SEC and CFTC crypto measures

The March 2026 joint interpretation and the June 2026 qualified-client threshold change are effective. The measures below remained proposals or agency work programmes at the research cut-off.

On 21 August 2026 the SEC proposed Regulation Crypto Assets, Release 33-11434 and Exchange Act Release 34-106150. Comments are due 20 October 2026. The proposal includes a start-up exemption of up to USD 5 million over a maximum four-year period, with a Notice of Reliance and public narrative disclosure. It also includes a fundraising exemption with a USD 20 million Tier 1 and USD 75 million Tier 2 over twelve months, financial statements, reports and retail limits. Proposed Rule 400 would permit the Commission to treat a covered investment contract as ceased after three conditions are met: promised essential efforts are completed or permanently stopped; no new such promise is intended; and a transition report is filed.

Under the proposal, a “covered investment contract” must involve a non-security cryptoasset and no other asset. A token that is itself a security falls outside the proposal. The fundraising route would also be limited to a substantially United States-based issuer and would exclude a registered or required-to-register investment company. Proposed Rule 400 would govern Commission administration. A private litigant could still argue that a security remains.

The SEC Chair’s July 2026 agenda statement seeks clearer onshore crypto fundraising, custody and tokenised-security trading rules. The SEC and CFTC’s March 2026 memorandum coordinates definitions, dual registrants, venues, reporting, examinations and enforcement. The CFTC’s March 2026 Innovation Task Force is developing approaches to crypto, blockchain, artificial intelligence and prediction markets. These measures do not create exemptions.

The Digital Asset Market Clarity Act, H.R. 3633, was reported in the Senate and referred to the Senate Banking Committee on 1 June 2026. The bill had not been enacted by the research cut-off and did not change SEC or CFTC jurisdiction.

Interaction among U.S. regimes

An exempt offering under Regulation D addresses Securities Act registration only. A pooled vehicle relying on section 3(c)(7) separately limits ownership to qualified purchasers; an adviser charging performance compensation separately applies the qualified-client rules; offshore sales separately apply Regulation S; and broker, exchange, money-transmission, sanctions, Employee Retirement Income Security Act, holder-registration, transfer and antifraud rules remain independently relevant. “Accredited investor,” “qualified purchaser,” “qualified client” and “qualified institutional buyer” are different legal categories and are not interchangeable.

EUROPEAN UNION AND EUROPEAN ECONOMIC AREA

Within the European Union and European Economic Area, classification begins with the second Markets in Financial Instruments Directive. A token representing a pro-rata interest in a professionally managed pool is likely to be a unit in a collective investment undertaking and therefore a financial instrument. The Markets in Crypto-Assets Regulation excludes cryptoassets that qualify as financial instruments. A financial-instrument classification brings the Alternative Investment Fund Managers Directive, national fund-marketing rules and investment-services licensing requirements into play. MiCA remains relevant to tokens and services outside the financial-instrument perimeter.

ESMA’s 2025 non-binding guidelines require competent authorities to make every effort to comply. They give a closely matching example: holders contribute capital to a portfolio, receive returns proportionate to portfolio performance, leave management to a manager and can redeem a proportionate interest. ESMA concludes that the example token is a unit in a collective investment undertaking. The final classification remains fact-specific under MiFID II and national law.

Offering, product and actor rules operate separately. A prospectus or qualified-investor exemption does not itself authorise fund marketing, placing, advice, order transmission, custody or other investment services.

MiFID II financial-instrument test

MiFID II expressly includes financial instruments recorded using distributed-ledger technology. A transferable security is a class of security negotiable on capital markets other than an instrument of payment. ESMA requires technology-neutral, substance-over-form analysis. The principal cumulative indicators are membership in a class, negotiability on a capital market and not being an instrument of payment. A whitelist, geographical restriction, lock-up or other contractual limit does not by itself prevent negotiability.

For a token carrying equal pro-rata economic rights in a managed portfolio, the collective-investment-unit category may be stronger than the general transferable-security category. Redemption as the principal exit does not prevent fund-unit classification, and use of a stablecoin for subscription does not change the legal character of the token received.

MiCA categories and offer exemptions outside MiFID II

This subsection applies only where a token is not a MiFID financial instrument. MiCA defines a cryptoasset as a digital representation of value or rights capable of electronic transfer and storage using distributed-ledger or similar technology. An asset-referenced token seeks stable value by reference to one or more values or rights. An electronic-money token seeks stable value by reference to one official currency. A utility token is intended only to provide access to a good or service supplied by its issuer.

Acceptance or accounting in a payment token or stablecoin does not make a yield-bearing portfolio token an asset-referenced token or electronic-money token. Access to an investment arrangement does not make it a utility token. Genuinely unique and non-fungible cryptoassets can fall outside MiCA, but fractionalisation or issuance in a large interchangeable series indicates fungibility; a label cannot manufacture the exclusion.

For an ordinary MiCA cryptoasset other than an asset-referenced or electronic-money token, article 4 generally requires a legal-person offeror and a compliant cryptoasset white paper. It also requires notification, publication, compliant marketing communications and article 14 conduct. Article 4(2) removes the white-paper drawing, notification and publication requirements, plus publication of marketing communications, for three offer types. They are an offer to fewer than 150 persons per Member State acting on their own account; a Union-wide offer of no more than EUR 1 million over twelve months; or an offer solely to qualified investors where only qualified investors may hold the token. The offeror must still be a legal person. Marketing communications must comply with article 7, and the article 14 conduct duties remain.

Article 4(3) excludes from MiCA Title II a genuinely free token; an automatically created ledger-validation reward; a utility token for an existing or operating good or service; and a token usable only within a limited contractual merchant network. A token is not free where the purchaser supplies personal data, fees, commissions or another benefit. Where use is confined to a limited merchant network, aggregate Union consideration above EUR 1 million in a twelve-month period triggers notification to the competent authority with an explanation of the claimed exemption; the authority may reject the characterisation. Article 4(5) separately waives cryptoasset-service-provider authorisation only for custody, administration and transfer services relating to an article 4(3)-exempt token, and only while there is no other non-exempt offer of that token and no admission to a trading platform. Publicly announcing an intention to seek admission to trading removes the article 4(2) and 4(3) exemptions. A voluntarily prepared white paper can also bring the title into operation.

The qualified-investor route requires that the token may only be held by qualified investors. An initial subscription gate does not satisfy that condition if later transfers can place the token with other holders.

An asset-referenced-token issuer normally must be established and authorised in the European Union or be a credit institution. The EUR 5 million route applies only where average outstanding value, calculated at the end of each calendar day over twelve months, never exceeds EUR 5 million and the issuer is not linked to a network of other exempt issuers. A separate route applies where offers and holdings are confined to qualified investors. Notification and white-paper requirements continue under each route.

An electronic-money-token issuer must be a credit institution or electronic-money institution and generally issue and redeem at par; there is no equivalent broad professional-only exemption. MiCA article 48(1) does not apply to issuers exempt under article 9(1) of the Second Electronic Money Directive. Most of MiCA Title IV also does not apply to electronic-money tokens falling under that directive’s articles 1(4) or 1(5), although MiCA’s white-paper and notification requirements in articles 48(7) and 51 remain. These electronic-money exemptions are narrow and do not create a general qualified-investor route.

MiCA cryptoasset services include custody, platform operation, crypto-to-funds and crypto-to-crypto exchange, execution, placing, reception and transmission of orders, advice, portfolio management and transfers. Professional clients are within the licensing perimeter. Full MiCA application began on 30 December 2024, and the maximum grandfathering period ended on 1 July 2026. ESMA states that a provider serving European clients without authorisation after its applicable transition is in breach and must cease.

Alternative Investment Fund Managers Directive

An alternative investment fund is a collective investment undertaking that raises capital from a number of investors to invest it under a defined policy for their benefit and is not an undertaking for collective investment in transferable securities. Pooled subscriptions, a defined strategy, discretionary allocation, pro-rata return and redemption strongly satisfy that formulation. Crypto contribution and smart-contract implementation do not prevent “raising capital” or erase an identifiable manager.

A non-EU pooled vehicle meeting these elements is a non-EU alternative investment fund. The alternative investment fund manager is the person that in substance exercises portfolio-management and risk-management responsibility.

Article 42 allows a Member State to permit a non-European manager to market a non-European fund to professional investors under its national private-placement regime. AIFMD II applies from 16 April 2026 and adds several conditions. The non-European manager must comply with specified disclosure, reporting and conduct provisions. Appropriate supervisory-cooperation arrangements must exist. The relevant manager or fund jurisdiction must not be an EU-designated high-risk third country for anti-money-laundering purposes. An Organisation for Economic Co-operation and Development Model Article 26-compliant tax-information agreement must exist with the marketing Member State. The jurisdiction also must not appear in Annex I of the European Union list of non-cooperative jurisdictions for tax purposes.

As at 17 February 2026, Panama appeared in Annex I. An alternative investment fund or manager established there may therefore be unable to use article 42 in a Member State applying the amended condition. Availability also depends on national transposition and the Member State’s private-placement regime. Member States may impose stricter conditions or decline the route.

Manager-size thresholds of EUR 100 million including leverage, or EUR 500 million for an unleveraged vehicle with no redemption for five years, create a lighter registration and reporting status for eligible European managers. The thresholds do not change the vehicle’s fund status or give a non-European manager a passport.

The 2024 amendment known as AIFMD II had to be transposed and generally applied from 16 April 2026. AIFMD II adds delegation, liquidity-management, loan-origination and reporting rules, but creates no outreach exemption. Implementation remains Member-State specific.

Marketing, pre-marketing and reverse solicitation

AIFMD marketing is a direct or indirect offering or placement, at the alternative investment fund manager’s initiative or on its behalf, of fund units or shares to Union investors. A compensated third party sourcing investors and explaining a particular fund can be acting “on behalf of” the manager. A pre-existing relationship does not change the statutory initiative.

The harmonised pre-marketing regime is principally available to authorised European managers. A third party acting for such a manager must fall within a specified regulated category: investment firm, bank, authorised fund manager or tied agent. For an authorised European manager, a professional investor’s subscription within eighteen months after pre-marketing began is deemed to result from marketing only where it concerns the fund referred to in the pre-marketing information or a fund established as a result of that pre-marketing. The manager must notify its home authority within two weeks after beginning and adequately document the activity. The harmonised regime gives no pre-marketing right to a non-European manager. Some states permit it with notifications or agents; others treat early product promotion as marketing.

A genuine unsolicited investor approach can fall outside manager-initiated marketing. Issuer- or distributor-initiated product contact, or a later reverse-inquiry letter, is inconsistent with genuine investor initiative.

MiCA article 61 separately allows a third-country cryptoasset service only where the client initiates it on its own exclusive initiative. ESMA interprets solicitation broadly to include calls, email, meetings, websites, social media, roadshows, sponsorship and anyone remunerated or incentivised on the provider’s behalf. A disclaimer cannot override the facts, and even a genuine request does not permit the firm to market a different product outside its context. Where the asset is a financial instrument, MiFID II and AIFMD govern instead, but the same fact-based approach to investor initiative remains relevant.

MiFID investment services and professional-investor criteria

MiFID investment services include receiving and transmitting orders, executing orders, portfolio management, investment advice, underwriting and placing financial instruments. A third party that supplies only a name and contact, without product information, endorsement, materials, persuasion or subscription assistance, may fall outside that list. Selecting investors for a particular tokenised fund, explaining strategy or return, recommending the token, passing offering material, negotiating or helping subscribe can be placing, investment advice or order transmission.

Success-linked compensation is evidence that a third party is distributing or acting for the manager, but there is no universal European rule that transaction compensation alone always creates authorisation. Fixed compensation likewise does not exempt regulated conduct. MiFID investment firms and their registered tied agents are authorised categories capable of performing these functions. The investment firm assumes full and unconditional responsibility for the tied agent’s promotion, solicitation, order transmission, placement and authorised advice.

MiFID inducement rules add a conflict layer. For non-independent services, a third-party payment generally must enhance service quality, not impair the duty to act in the client’s best interests and be disclosed. Independent advisers and portfolio managers generally may not retain third-party payments.

Per se professional clients include regulated financial entities, collective investment schemes and managers, governments, central banks and specified institutions. A large undertaking must satisfy two of three tests: balance sheet of at least EUR 20 million, net turnover of at least EUR 40 million, and own funds of at least EUR 2 million. An elective professional needs a qualitative assessment and ordinarily two of three: an average of ten significant transactions per quarter in the relevant market over the previous four quarters; a financial-instrument portfolio above EUR 500,000; and at least one year in a relevant professional financial-sector position. It must request professional treatment, receive a written warning about lost protections and acknowledge the consequence separately.

Prospectus, UCITS, DLT and anti-money-laundering overlays

The Prospectus Regulation excludes units of open-ended collective investment undertakings from its scope; AIFMD still applies. If a different token is a closed-ended transferable security, material exemptions include offers solely to qualified investors; to fewer than 150 non-qualified persons per Member State; in denominations of at least EUR 100,000; or requiring at least EUR 100,000 per investor. From 5 June 2026, an offer is exempt from the European prospectus-publication obligation where it is not subject to article 25 notification and aggregate Union consideration is less than EUR 12 million per issuer or offeror over twelve months. A Member State may instead select a threshold below EUR 5 million and require a national disclosure document. Article 3(2c) governs aggregation of ongoing and preceding offers. A prospectus exemption does not cure unlawful fund marketing or investment services.

An undertaking for collective investment in transferable securities, or UCITS, is an authorised European retail fund investing in specified liquid assets with risk spreading and redeemable units. Issuing a non-EU tokenised fund’s interests onchain does not make it a UCITS. The Distributed Ledger Technology Pilot Regime permits regulated trading and settlement infrastructures to test distributed-ledger systems; it creates no offering, fund or service exemption.

The recast Transfer of Funds Regulation has applied since 30 December 2024 where a cryptoasset service provider participates in a transfer. Originator and beneficiary information must accompany the transfer; self-hosted addresses also engage checks, including an ownership or control assessment above EUR 1,000. The new Anti-Money Laundering Regulation was adopted in 2024 but most provisions apply from 10 July 2027. Until then national laws implementing the directives and the directly applicable transfer rule remain central.

European Economic Area and 2026 proposals

MiCA was incorporated into the European Economic Area Agreement by Joint Committee Decision 41/2025, effective 24 June 2025. Norway’s implementing cryptoasset legislation took effect on 1 July 2025. Iceland, Liechtenstein and Norway still require national checks on supervision, transition periods and later amendments. AIFMD private placement remains country-specific.

The European Commission’s December 2025 Market Integration and Supervision Package proposes greater ESMA responsibility for cryptoasset-service-provider authorisation and supervision, plus an expanded DLT Pilot Regime. The Commission opened the statutory MiCA review consultation on 20 May 2026, with responses due 30 September 2026. The package and consultation are policy or legislative processes. They create no current permissions or obligations.

UNITED KINGDOM

Under United Kingdom law, a token representing pooled property managed for investors may be an interest in a collective investment scheme and an alternative investment fund. A token conferring rights equivalent to conventional securities or fund units is generally treated within the existing investment perimeter rather than primarily as a qualifying cryptoasset. Product classification, fund marketing, section 21 financial promotion and regulated-activity rules operate separately.

Section 235 of the Financial Services and Markets Act 2000 covers arrangements concerning property whose purpose or effect is to permit participants to receive profits or income. Participants must lack day-to-day control, and either contributions and returns must be pooled or the property must be managed as a whole by or for the operator. The statutory order excludes specified corporate structures. Classification can therefore depend on whether the token is an ordinary corporate security, an interest in a separate pooled arrangement or an interest in an open-ended investment company. A corporate exclusion from the collective-investment-scheme definition does not necessarily prevent alternative-investment-fund status.

Financial Conduct Authority guidance treats a crypto token conferring rights equivalent to shares, debt instruments or units in a collective investment scheme as a security token and specified investment. A tokenised fund unit is therefore outside the principal qualifying-cryptoasset category used for the special retail crypto-promotion regime.

Regulated activities and introductions

Potential activities include establishing, operating or winding up a collective investment scheme; managing an alternative investment fund; dealing; arranging; advising; and safeguarding or administering investments. A neutral transfer of name and contact details can remain outside arranging. Selecting a prospect for a particular tokenised investment product, organising an investment meeting, explaining or endorsing it, sending materials, assisting terms or subscription, or receiving outcome-linked compensation materially increases arranging risk.

The Regulated Activities Order article 33 exclusion principally concerns introductions made to obtain independent advice from an authorised or exempt person. It provides no general issuer-specific finder safe harbour. Transaction-linked commission is one indicator of arranging; other facts also matter.

Section 21 financial promotions and available exemptions

Section 21 of the Financial Services and Markets Act prohibits a person, in the course of business, from communicating an invitation or inducement to engage in investment activity unless the communicator is authorised, an authorised person has approved the communication, or an exemption in the Financial Promotion Order applies. It reaches an overseas communication capable of having effect in the United Kingdom. Breach can be criminal and can affect agreement enforceability. An invitation to a product briefing, a return description or an onboarding link can be an inducement before any subscription.

Article 15 provides a narrow introducer exemption. The introduction must be to the relevant authorised or exempt person; the introducer must be neither that person’s close relative nor a member of its group; the introducer may receive no reward other than from the recipient; and the recipient must not have sought merits advice from the introducer. If advice was sought, the introducer must decline and recommend an authorised adviser. FCA guidance treats a third-party commission as recipient-sourced only where it genuinely belongs to and is held to the recipient’s order; mere disclosure is insufficient. Compensation paid by an issuer, manager, promoter or another third party, whether fixed or transaction-linked, ordinarily prevents reliance on article 15.

Article 19 can cover communications directed only at investment professionals. Article 49 can cover specified high-net-worth companies and bodies where the communicator reasonably believes the recipient qualifies and the formal conditions and legends are met. A body corporate qualifies where it, or an undertaking in the same group, has called-up share capital or net assets of at least GBP 500,000 if the recipient has more than twenty members or is a subsidiary of an undertaking with more than twenty members, and otherwise at least GBP 5 million. Specified partnerships and unincorporated associations generally need GBP 5 million net assets. A high-value trust must have at least GBP 10 million in gross cash and investments currently or at some time during the immediately preceding year.

These exemptions remove section 21 for the particular communication. They do not remove alternative-investment-fund marketing, arranging, advice, fund management or other regulated activities. Where the promoted product is an unregulated collective investment scheme, authorised firms also face section 238 and the FCA’s restrictions. An authorised approver may approve only a communication that it could lawfully make.

Foreign-fund marketing and reverse inquiry

Marketing is a direct or indirect offering or placement at the alternative investment fund manager’s initiative or on its behalf. A non-United Kingdom manager marketing a non-United Kingdom fund normally uses the United Kingdom national private-placement regime and notifies the Financial Conduct Authority before active marketing to professional investors. Disclosure and ongoing reporting follow. A compensated third party explaining or inviting investment in a particular fund is likely acting on the manager’s behalf.

A genuine unsolicited investor request can fall outside active marketing. A representation signed after outreach by an issuer, manager or paid intermediary does not manufacture reverse solicitation. Preliminary material can still be a financial promotion even where it is not yet sufficiently complete to be alternative-investment-fund marketing.

The Regulated Activities Order’s overseas-person exclusions can cover limited dealings, arranging or advice through an authorised person or after a “legitimate approach,” meaning an unsolicited approach or one following solicitation compliant with section 21. They provide no financial-promotion exemption, private-placement notification or permission to operate or manage a collective investment scheme.

Qualifying cryptoasset promotions and the new public-offer regime

A qualifying cryptoasset is broadly fungible and transferable but excludes a cryptoasset already classed as a controlled investment, including a security token or collective-investment-scheme unit. A token that is a security token or collective-investment-scheme unit cannot rely on the qualifying-cryptoasset promotion regime.

For a true qualifying cryptoasset, the four principal routes are communication by an authorised person, approval by an authorised person, communication by a Money Laundering Regulations-registered cryptoasset business about its own services, or a Financial Promotion Order exemption. Retail communications have risk warnings, cooling-off, appropriateness and incentive restrictions. Money-laundering registration is not permission to operate or promote a fund or security token.

The Public Offers and Admissions to Trading Regulations 2024 took effect on 19 January 2026. A public offer of relevant securities is prohibited unless a Schedule 1 exception applies. Material exceptions include total United Kingdom consideration no more than GBP 5 million, qualified-investor-only offers, fewer than 150 non-qualified United Kingdom investors, denominations of at least GBP 50,000 and acquisition of at least GBP 100,000 per investor. Open-ended collective-investment-scheme units are outside this regime. For a closed-ended tokenised fund or another relevant security, the exceptions require separate analysis. They do not remove section 21, regulated-activity or fund-marketing duties.

2026 Cryptoassets Regulations and pending FCA reform

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, SI 2026/102, were made on 4 February 2026. Most of the new regulated-activities regime commences on 25 October 2027, and the application window is scheduled for 30 September 2026 to 28 February 2027. The future regime covers specified stablecoin issuance, custody, qualifying-cryptoasset trading platforms, dealing, arranging and staking. Cryptoasset lending and borrowing are not freestanding named regulated activities in the instrument; particular arrangements may be captured as dealing as principal or agent or arranging deals. A tokenised fund unit remains within the traditional securities and fund perimeter, although related custody or service activity may also be caught after commencement. HM Treasury’s April 2026 draft amendment concerning United Kingdom-issued qualifying stablecoins remained a proposal at the research cut-off.

The FCA’s July 2026 consultation on a tiered replacement United Kingdom alternative-investment-fund-manager regime closes on 14 October 2026, with implementation expected no earlier than 2028. The consultation has no current legal effect.

SWITZERLAND

Swiss law distinguishes product approval from the obligations applying to service providers. A token representing equal economic interests in assets managed collectively for investors may be a foreign collective investment scheme and a security or ledger-based security. Offers limited to qualified investors can avoid FINMA product approval, but financial-service, adviser-registration, prospectus, compensation and anti-money-laundering rules remain separate.

The Collective Investment Schemes Act covers assets raised from investors for collective investment and managed for their account, with investor requirements met equally. Foreign schemes include open- and closed-ended arrangements established abroad. Pooling, equal pro-rata economics, strategy management and redemption are significant indicators.

The Financial Services Act includes collective-investment-scheme units among financial instruments. Standardised rights suitable for mass trading can be certificated, uncertificated, intermediated or ledger-based securities. FINMA classifies tokens by substance as payment, utility, asset or hybrid tokens. A token carrying rights to assets or portfolio earnings can therefore be an asset token and a fund unit.

Client categories

The Financial Services Act separates retail, professional and institutional clients. Professional clients include regulated financial firms, specified public entities, pension institutions, companies with professional treasury operations and large companies. A large company must exceed at least two of three values: a CHF 20 million balance sheet, CHF 40 million turnover and CHF 2 million equity.

A high-net-worth retail client can opt into professional status in writing with at least CHF 500,000 of eligible assets plus the required knowledge or experience, or at least CHF 2 million of eligible assets. Professional clients can elect retail treatment. “Qualified investor” under the Collective Investment Schemes Act overlaps with but is not identical to professional-client status; the exact category and opt-out must be documented.

Foreign-fund offer route

A foreign collective investment scheme offered to non-qualified investors generally requires prior FINMA approval, compliant documents, a Swiss representative and a paying agent. A foreign scheme offered only to qualified investors generally does not require product approval. Where the qualified investors are high-net-worth retail clients who opted into professional status, the representative and paying-agent requirements remain. The lighter route is therefore clearest for regulated institutional investors and other professional categories, excluding opted-up high-net-worth individuals.

The Swiss Limited Qualified Investor Fund regime applies only to a Swiss fund reserved to qualified investors and administered by a FINMA-supervised institution; it does not extend to an unlicensed foreign arrangement.

Financial services, prospectus and compensated introductions

Financial services include acquiring or disposing of financial instruments, receiving and transmitting orders, portfolio management, and personal investment recommendations. A foreign provider’s client advisers generally need entry in a Swiss adviser register where the foreign provider lacks appropriate home-state prudential supervision or serves Swiss private clients. The principal exemption protects advisers of a foreign provider subject to full prudential supervision and serving only professional or institutional clients. Opted-up high-net-worth individuals remain private clients for this adviser-register analysis. Customer sophistication alone does not allow a foreign provider without full home-state prudential supervision to rely on the principal professional-client exemption.

A bare transfer of contact details, without product information, endorsement, document delivery, recommendation, negotiation or order assistance, may fall outside the definitions of offer and financial service. Explaining return, strategy, liquidity, redemption or token mechanics can be an offer or advertising; a tailored recommendation can be advice; and taking an instruction can be order transmission. Compensation structure is evidence of the relationship but is not independently determinative; fixed compensation is not a statutory exemption.

Where a third party acts as a Financial Services Act financial-service provider, compensation connected with the financial service may be retained only after prescribed advance disclosure and express client waiver. Otherwise, it must be passed to the client. The disclosure must state the amount. If the amount is unknown, it must state the calculation parameters and range. Article 26 does not bring a bare introducer within the financial-service definition solely through its compensation rule, although the introducer’s conduct may independently constitute an offer or financial service.

A public security offering or trading admission generally requires a prospectus. Article 36 exempts five offer types from that requirement. They cover offers only to professional clients; offers to fewer than 500 investors; denominations of at least CHF 100,000; acquisitions requiring at least CHF 100,000 per investor; and total consideration no more than CHF 8 million over twelve months. Foreign-fund, adviser, conduct and anti-money-laundering duties continue, and retail offers generally require a key information document.

Reverse inquiry, anti-money-laundering and proposals

The Financial Services Ordinance provides a narrow client-initiative route where the relationship or service arose at the client’s express initiative. Information supplied at a client’s own request is not an offer where there was no prior advertising of that instrument by the provider or an agent. A pre-existing relationship does not itself establish client initiative. Product-specific contact, an invitation, prior advertising or compensated solicitation generally defeats the premise of an unprompted request.

Financial intermediation carried on in or from Switzerland can engage the Anti-Money Laundering Act when it involves accepting, transferring or investing assets, operating wallets, exchange functions or specified token-payment activity. Swiss domicile or registration can create the required nexus. A de facto Swiss branch can also create it where persons in Switzerland permanently assist a foreign intermediary with essential financial-intermediation activity. A Swiss client alone does not make a purely offshore operator directly subject, although Swiss counterparties retain their own duties. A Swiss financial intermediary generally requires supervision or membership in a recognised self-regulatory organisation.

For institutions supervised by FINMA, where required payment information cannot be transmitted, transfers involving an external wallet are subject to the customer or third-party identification and technical wallet-ownership proof described in FINMA Guidance 02/2019. Providers also identify customers and beneficial owners, monitor transactions and report suspicions.

The Federal Council’s October 2025 consultation proposed payment-instrument institutions, a tailored stablecoin-issuer regime and a crypto-institution licence. Consultation closed on 6 February 2026. As at the research date, responses were still being evaluated and no enacted parliamentary measure had replaced current law.

CANADA

Under Canadian securities law, a token or token-platform arrangement can be a security where value is invested for expected profit in a common enterprise materially dependent on the managerial efforts of others. A pooled managed vehicle may also be an investment fund or mutual fund. Prospectus exemptions operate separately from dealer, adviser, investment-fund-manager and anti-money-laundering requirements.

International-dealer and international-adviser exemptions apply only to qualifying, appropriately regulated foreign firms that satisfy detailed conditions. Investor eligibility alone does not create an exemption for an unregistered introducer or distributor.

Pacific Coast Coin investment-contract test

The controlling Canadian formulation comes from the Supreme Court of Canada in Pacific Coast Coin Exchange v Ontario Securities Commission. The court asks whether there is an investment of money with an intention or expectation of profit, in a common enterprise, where the success-producing managerial efforts of persons other than the investor are the essential efforts. “Common enterprise” is approached flexibly: the investor’s fortunes may be interwoven with and dependent on the promoter’s or a third party’s efforts. The court stressed substance, economic reality and the protective purpose of securities law rather than contractual form.

Canada applies much the same economic inquiry as the United States without mechanically requiring profits to come “solely” from others. An investor can have limited rights and still depend on a manager for the outcome. In 2024, the Ontario Capital Markets Tribunal applied that approach to crypto contracts and treated the platform’s website, onboarding and continuing operational dependence as part of the regulated scheme. The relevant “security” can therefore be the token, the contractual entitlement or the complete token-plus-platform arrangement.

For a tokenised managed pool, a contribution of fiat money or cryptoassets can constitute an investment of value. Where holders share proportionately in a portfolio and performance depends materially on selection, allocation, execution, risk controls, valuation and redemption performed by others, the interest is likely a security. Pooling without day-to-day investor control can also produce an investment-fund classification. Contractual redemption by reference to proportionate net asset value may bring the vehicle within provincial mutual-fund definitions.

Prospectus exemptions and investor criteria

National Instrument 45-106, Prospectus Exemptions, supplies the main private-capital routes. The accredited-investor exemption is the most relevant. It includes Canadian and analogous foreign regulated financial institutions; governments; regulated pension funds; registered dealers and advisers; qualifying managed accounts and investment funds; and several financial tests for persons and entities.

For an individual, the principal tests include financial assets, net of related liabilities, exceeding CAD 1 million; financial assets exceeding CAD 5 million; net assets of at least CAD 5 million; or pre-tax income exceeding CAD 200,000 in each of the two most recent calendar years with a reasonable expectation of exceeding that level in the current year. The combined spousal-income alternative is CAD 300,000 on the same timing basis. For an entity other than an individual or investment fund, the general net-assets test is at least CAD 5 million, as shown on the most recently prepared financial statements. “Financial assets” generally means cash, securities, a deposit contract, evidence of deposit that is not a security, and certain insurance contracts. A home or operating business alone does not meet that definition.

An individual relying on paragraph (j), (k) or (l), which cover the CAD 1 million financial-assets, income or CAD 5 million net-assets tests, must deliver signed Form 45-106F9 at or before signing the purchase agreement. The distributor must retain it for eight years. Paragraph (j.1) covers an individual with more than CAD 5 million of financial assets and does not require Form 45-106F9. Form 45-106F1 is generally due within ten days after the distribution. An investment fund using the accredited-investor, minimum-amount or additional-investment exemptions may instead use the special annual route and file no later than thirty days after calendar year-end. Applicable fees, offering-document liability and resale restrictions remain. Accreditation is assessed when the security is distributed; self-certification alone is insufficient to establish compliance.

The minimum-amount exemption is a separate route. The purchaser must not be an individual, must buy as principal, and must pay at least CAD 150,000 in cash at the time of the distribution. An entity created or used solely to make the purchase cannot manufacture eligibility. This route can fit a genuine institutional treasury, but it does not address dealer or manager registration.

The offering-memorandum exemption is broader but varies by province and entails prescribed disclosure, risk acknowledgement, statutory liability and continuing obligations. In jurisdictions using the common investment limits, a non-eligible individual is generally capped at CAD 10,000 over twelve months; an eligible investor at CAD 30,000; and an eligible investor receiving suitability advice from a portfolio manager, investment dealer or exempt-market dealer at CAD 100,000. The exemption is unavailable or restricted for investment funds in several jurisdictions, including New Brunswick, Ontario and Québec.

The private-issuer exemption can apply to an issuer that is not a reporting issuer or investment fund, has transfer restrictions in its constituting documents or security-holder agreements, and has no more than fifty beneficial owners excluding employees and former employees. Sales must have been confined to the enumerated section 2.4 categories: specified insiders, family and close associates, existing holders, accredited investors and the other listed persons. Sophistication by itself is not a private-issuer category. Except for an accredited-investor distribution, section 2.4(3) also restricts commissions or finder’s fees paid to an issuer director, officer, founder or control person. Because the exemption is unavailable to an investment fund and depends on owner and transfer restrictions, it will not apply to many tokenised pooled vehicles. Employee, founder, control-block and other transaction-specific exemptions do not constitute a general route for tokenised fundraising.

Dealer-registration business trigger and compensation

Canadian securities statutes define “trade” broadly to include acts, advertisements, solicitations, conduct and negotiations directly or indirectly in furtherance of a sale. National Instrument 31-103 and its Companion Policy then ask whether the person is in the business of trading. The principal indicators are activity similar to a registrant’s; direct or indirect intermediation; repetition, regularity or continuity; receiving or expecting compensation; and direct or indirect solicitation. No one factor is automatically decisive, but repeated product solicitation plus compensation is a strong combination.

Compensation is broader than a closing commission. Meeting fees, deployment fees, token allocations, revenue shares and other economic benefits can count. A fixed retainer is less probative because it does not rise with a transaction. Product solicitation or repeated intermediation can still trigger registration. A product-free introduction lacking recommendation, negotiation, document collection or onboarding participation presents fewer business-trigger indicators. Canada has no general finder safe harbour for an otherwise registrable distribution business.

Section 8.5 of National Instrument 31-103 exempts a person for a trade made through an appropriately registered dealer, but the exemption is unavailable where the person seeking it directly solicits or contacts a purchaser or prospective purchaser in furtherance of the trade. Appointing a registered dealer only after that solicitation does not reverse the earlier conduct.

The international-dealer exemption in section 8.18 is narrow and institutional. It generally permits a foreign dealer to trade a “foreign security” with a permitted client, subject to conditions. The dealer’s head office must be abroad, with registration in the corresponding home-state dealer category and an actual dealer business there. Permitted counterparties are the issuer, a permitted client or a non-resident. The foreign dealer must appoint a Canadian agent for service, give prescribed notices about its unregistered and foreign status, and make annual reliance filings. A “permitted client” includes regulated institutions and pension funds, an individual with more than CAD 5 million of financial assets, and an entity other than an individual or investment fund with at least CAD 25 million of net assets. Investor eligibility alone does not satisfy the exemption; the foreign intermediary must independently meet its conditions.

Advice and investment-fund management

Personalised recommendations about acquiring or holding a particular token or security can engage adviser registration. Section 8.25 of National Instrument 31-103 generally exempts advice that does not purport to be tailored to the recipient, with conflict disclosure where the speaker has a financial interest; Ontario has a parallel statutory rule. The exemption does not permit tailored product recommendations to selected prospects. A success fee or deployment fee is itself a financial interest requiring disclosure where the exemption is otherwise available.

Section 8.26’s international-adviser exemption permits a properly regulated foreign adviser to advise permitted clients principally on foreign securities. Its head office must be abroad; it must be registered or exempt and operating as an adviser in its home jurisdiction; at the end of its latest financial year, no more than ten per cent of the aggregate consolidated gross revenue of the adviser, its affiliates and affiliated partnerships may derive from portfolio-management activities in Canada; it must appoint an agent for service; it must give prescribed foreign-status notices; and it must make annual filings. Advice on a non-foreign security must be incidental. Product foreignness alone does not qualify an unregistered foreign operator or introducer.

If a tokenised vehicle is an investment fund, the person directing its business and affairs may require investment-fund-manager registration. Multilateral Instrument 32-102 applies in Ontario, Québec and Newfoundland and Labrador. It is not in force in New Brunswick, which participates in Multilateral Policy 31-202. Relevant exemptions include having no local securityholders or no active local solicitation, and a permitted-client route where every local distribution is made under a prospectus exemption to a permitted client. The latter requires a foreign manager and fund, no Canadian reporting-issuer status, an agent-for-service filing, prescribed investor notices, regulatory-action filings and annual notices or fees. Investment-fund-manager registration is analysed province by province.

Crypto trading rules, anti-money-laundering and the Stablecoin Act

Canadian securities regulators distinguish an unencumbered cryptoasset from the contract under which a platform provides exposure, custody or delivery. A token that is itself a security remains regulated; in addition, a “crypto contract” can be a security or derivative where the customer depends on the platform for custody, trading or future delivery. Cryptoasset trading platforms conducting Canadian business are expected to register, and prospectus relief is fact-specific. A direct, non-custodial onchain transfer does not remove the security analysis for a managed-fund token.

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act can require registration with the Financial Transactions and Reports Analysis Centre of Canada as a domestic or foreign money-services business. A foreign business can be caught if it provides virtual-currency exchange or transfer services to Canadian clients and directs services at Canada. Marketing to Canada is one directional indicator. Registration, a compliance programme, identity verification, beneficial-owner checks, recordkeeping, transaction reporting and the travel rule follow. A person whose role is limited to introducing a security has a less direct money-services-business connection if the person does not exchange, transfer or control virtual currency. The functions actually performed in subscription, issuance, redemption and wallet control remain determinative.

The federal Stablecoin Act received Royal Assent on 26 March 2026, but as at 25 August 2026 it was enacted and wholly not in force. Section 97 requires commencement by Order in Council. Its future regime will regulate domestic and foreign non-financial issuers that make fiat-backed stablecoins available to Canadians. Requirements will include Bank of Canada registration and supervision, one-to-one high-quality liquid reserves, par redemption, management and disclosure duties, and a prohibition on paying interest or yield solely for holding the stablecoin. Supporting regulations remained under development, and the government expected operation in 2027. The Act does not transform a yield-bearing investment token into a permitted payment stablecoin. Provincial securities regulation continues to apply to securities and crypto trading.

SINGAPORE

Singapore applies the principle of “same activity, same risk, same regulatory outcome.” A managed pooled yield arrangement is likely to be a collective investment scheme and its token a capital-markets product. Tokenisation does not change that classification. Digital-payment-token rules can apply where a token or service performs a statutory exchange or payment function, but they do not displace securities and fund law.

Section 2 of the Securities and Futures Act defines a collective investment scheme as an arrangement concerning property where participants lack day-to-day management control, the property is managed as a whole or contributions and returns are pooled, and the arrangement provides profits, income or other returns. A pooled arrangement with a common strategy, passive holders and pro-rata returns is likely to satisfy this definition. If the rights instead create a repayment obligation, the token can be a debenture or another security; onchain form is neutral.

Accredited and institutional investors

An individual accredited investor generally satisfies one of three tests: net personal assets above SGD 2 million, counting the primary residence only at the lower of its net value and SGD 1 million; net financial assets above SGD 1 million; or income of at least SGD 300,000 in the preceding twelve months. A corporation generally needs net assets above SGD 10 million on its latest audited or qualifying certified balance sheet. Trust and other categories also exist.

Under the accredited-investor opt-in rules, the institution must assess eligibility, explain in writing the consequences of accredited treatment, obtain written opt-in and allow withdrawal. Wealth alone does not complete the procedure.

Institutional investors are a status category including governments and central banks, specified regulated financial institutions, qualifying foreign-regulated entities, pension funds and collective investment schemes. Institutional status does not turn on a general investment minimum.

Collective-investment-scheme offer routes

A retail collective investment scheme ordinarily requires authorisation or recognition under sections 286–287, a registered prospectus and a product-highlights sheet. Four private routes apply.

Section 304 exempts an offer made solely to institutional investors from the retail authorisation and prospectus regime, with no numerical cap. Licensing and distribution rules remain.

Section 305 permits a “restricted scheme” offer to relevant persons, principally accredited investors and specified accredited-investor entities and trusts, or to a person acquiring as principal for at least SGD 200,000 per transaction. It prohibits an accompanying advertisement and restricts selling and promotional expenses to prescribed administrative, professional and authorised-intermediary payments. A restricted scheme normally requires prior notification through the MAS CISNet system, an information memorandum, entry on the restricted-scheme list, annual declarations and resale controls. Listing on the restricted-scheme list conveys no MAS approval or endorsement.

Section 302C permits an offer to no more than fifty persons during twelve months, subject to aggregation and look-through, no accompanying advertisement, and restricted selling and promotional expenses. It does not import section 302B’s personal-offer test. Section 302B separately covers a genuinely personal small offer raising no more than SGD 5 million during twelve months. Prior contact, a professional relationship or an earlier indication of interest is relevant to whether that offer is personal. Prescribed warnings, no advertising and promotional-expense controls apply as stated in the relevant route. Parallel exemptions exist for security tokens rather than collective-investment-scheme units.

Dealing, advice and cross-border services

Section 82 prohibits carrying on a business in a regulated activity or holding out as doing so without a capital-markets-services licence or exemption. Dealing in capital-markets products includes making or offering an agreement and inducing or attempting to induce another person to acquire, dispose of or subscribe. Fund management and custody are separate activities. Under the Financial Advisers Act, advice and research on investment products can be financial-advisory services.

A social handoff confined to consent to share name and contact, without product content or follow-up, may fall short of inducement. Indicators pointing toward inducement include filtering prospects by investment appetite, stating returns or liquidity, sending a product deck or link, pre-screening eligibility within a sales process, booking or joining the product meeting, following the prospect to subscription, or receiving a meeting, commitment or deployment fee. Neither a pre-existing network nor fixed remuneration is a statutory safe harbour.

The Securities and Futures Act can reach activity conducted partly inside Singapore, partly outside it, or wholly offshore. For wholly offshore conduct, a substantial and reasonably foreseeable Singapore effect is required. Foreign-affiliate arrangements are narrow and require a related Singapore licensed or exempt firm plus foreign supervision. They provide no offshore solicitation exemption.

Payment Services Act token services and MAS policy

The Payment Services Act regulates dealing in digital payment tokens, arranging exchanges, transmission, custody or control, and inducements to buy or sell. The expanded scope took effect on 4 April 2024. A payment-service business in Singapore needs the appropriate licence or exemption; customer-asset segregation, trust, custody and recordkeeping rules can apply.

MAS supervisory guidance directs licensed digital-payment-token service providers not to promote their services to the general public through public transport, public websites, third parties or influencers. Promotion is generally confined to official channels and must present risk fairly. The guidance creates no offer exemption.

The Financial Services and Markets Act overseas-only digital-token-service-provider regime took effect on 30 June 2025. It applies to relevant persons carrying on the overseas-only business from a place in Singapore. It also applies to Singapore-incorporated companies carrying on that business outside Singapore, even without providing it from a Singapore place of business. “Digital token” includes a digital payment token and a transferable electronic capital-markets product. Dealing, inducement, transfer, custody and advice are within scope. MAS stated that it generally would not license overseas-only models because of anti-money-laundering and supervisory risk.

Licensed token providers face customer due diligence, beneficial-owner verification, monitoring, screening, suspicious-transaction reporting, transfer-information and unhosted-wallet controls. MAS finalised a single-currency stablecoin policy in 2023, but the current Payment Services Act consolidation contains no separate enacted statutory stablecoin route. The policy does not create an available “MAS-regulated stablecoin” licence. Project Guardian supports regulated institutional tokenisation; it does not exempt unlicensed products.

HONG KONG

A pooled or collectively managed virtual-asset return arrangement can be a collective investment scheme in Hong Kong, and a token representing the associated rights can be a security. The Securities and Futures Commission treats tokenisation as a recordkeeping and distribution layer. Existing product categories continue to govern. Product-offer exemptions and intermediary licensing remain separate questions.

The statutory collective-investment-scheme test concerns property, absence of day-to-day participant control, management as a whole or pooling, and a purpose or effect of providing profit, income or return. A pooled arrangement with passive participants and collectively managed returns may satisfy the test even where the underlying assets are non-security virtual assets.

Professional-investor offer exemption

Section 103 prohibits issuing in or outside Hong Kong an advertisement, invitation or document inviting the Hong Kong public to acquire securities, structured products or collective-investment-scheme interests unless authorised or exempt. Section 103(3)(k) provides the principal exemption where the products are or are intended to be disposed of only to professional investors.

An individual professional investor generally needs a portfolio of at least HKD 8 million. A corporation or partnership needs a portfolio of HKD 8 million or total assets of HKD 40 million. A trust corporation needs entrusted assets of HKD 40 million. A qualifying wholly owned investment-holding company can derive status from its owners. “Portfolio” broadly includes securities, certificates of deposit and custodian-held money.

Statutory professional-investor status is distinct from the separate institutional- and corporate-professional-investor treatment under the SFC Code of Conduct. A product-offer exemption leaves suitability and client protections in place; corporate waivers require their own assessment.

In Pacific Sun, Hong Kong’s Court of Final Appeal held that the professional-investor exemption can operate even if the advertisement is not expressly restricted on its face, provided the product is genuinely intended for disposal only to professional investors. The defendant bears the evidential burden. A retail disposal by the issuer or distribution chain falls outside section 103(3)(k) and strongly contradicts an asserted professional-investor-only intention. An uncontrolled later secondary transfer requires factual analysis and is not necessarily retroactively fatal. Pre-distribution status controls and the breadth of advertising are relevant evidence of whether the professional-investor-only intention was genuine.

The fewer-than-fifty-person, HKD 500,000 minimum-consideration and HKD 5 million aggregate safe harbours in companies legislation concern ordinary shares and plain debentures. They do not extend generally to collective investment schemes or structured products.

Licensing, compensation and active marketing

Section 114 prohibits carrying on a business in a regulated activity without a licence or registration. Relevant categories are Type 1 dealing in securities, including fund or security-token distribution; Type 4 securities advice; Type 7 automated trading services; and Type 9 asset management.

SFC guidance states expressly that introducing a client to a securities dealer for commission, rebate or other remuneration may be a regulated activity. Public incentive programmes paying for successful introductions are generally unacceptable because the introducer may be unlicensed and the licensed firm may aid and abet it. A hyperlink alone is not necessarily regulated; an invitation or inducement to use the linked service can be.

Repeated introductions, a product deck or link, product discussion, attendance at the meeting, eligibility screening within a funnel, or meeting or deployment compensation can create serious Type 1 risk. Fixed remuneration removes transaction linkage as one indicator. It provides no exemption.

Section 115 reaches an offshore person that actively markets to the Hong Kong public a service that would be regulated if performed there. Professional-investor status does not switch it off. A Hong Kong plan, direct mail, local media, continuous activity, Hong Kong packaging or currency, repeated calls and targeted internet content are adverse indicators. Customer initiative weighs the other way, but issuer-, manager- or paid-intermediary-created interest cannot be converted into reverse inquiry by a later label. Section 103 separately reaches materials issued offshore to the Hong Kong public.

Virtual-asset platforms, Stablecoins Ordinance and proposed licences

A centralised virtual-asset trading platform operating in Hong Kong or actively marketing Hong Kong investors must be licensed. A platform for security tokens needs Type 1 and Type 7 licences; a non-security virtual-asset platform is licensed under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The SFC recommends dual licensing because classification can change.

The Stablecoins Ordinance took effect on 1 August 2025. It requires licensing for specified fiat-referenced stablecoin issuance in Hong Kong, issuance abroad where the token is wholly or partly referenced to the Hong Kong dollar, and active marketing of the issuance business to the Hong Kong public. The Hong Kong Monetary Authority issued licensing, supervision and anti-money-laundering guidance and granted the first two licences in April 2026. A project that accepts a stablecoin does not become its issuer for that reason alone; custody, dealing and settlement functions remain separately classified.

An April 2026 pilot permits secondary trading of certain tokenised SFC-authorised products on licensed platforms under controls. It does not authorise private unauthorised products. By May 2026, the authorities had published consultation results for proposed new licences covering virtual-asset dealing and custody, plus virtual-asset advice and management. The proposals were not operative statutes at the cut-off. The Government intended legislation later in 2026.

Licensed firms and platforms face customer due diligence, beneficial-owner verification, monitoring, records, suspicious-transaction reporting and virtual-asset transfer-information duties.

SAUDI ARABIA

Saudi rules treat introductions made in relation to a securities offering as capable of constituting arranging. A pooled managed arrangement may be an investment fund and its token a fund unit or another security. A foreign-fund private placement ordinarily uses a Saudi capital market institution, and the foreign manager must be authorised in a jurisdiction that the Capital Market Authority regards as having sufficiently equivalent regulatory standards.

The current glossary defines an investment fund as a collective scheme that permits investors to participate collectively in profits and is managed by a fund manager for specified fees. Securities include shares, debt, certificates, units, derivatives and rights or interests in them. Tokenisation leaves those definitions unchanged. The Securities Business Regulations treat activity as carried on in the Kingdom where it is performed from a permanent place there and create a presumption where activity is conducted in the Kingdom or with or for a person there.

Arranging, dealing, managing and advising

The Securities Business Regulations define dealing to include buying, selling, managing subscriptions and underwriting as principal or agent. Arranging includes introducing parties in relation to an offering or underwriting and otherwise bringing about a securities transaction. Managing includes discretionary management and operating investment funds. Advising covers the merits or risks of a security, associated rights, financial planning or wealth management. Custody includes safeguarding another person’s securities or arranging for another to do so.

Performing these activities by way of business requires authorisation as a capital market institution unless a narrow exclusion applies. The incidental-professional exclusion requires the activity to be necessary to a non-securities principal business and not separately remunerated. Arranging exclusions are limited, including specified transactions where the arranger is itself a party, certain issuer activity and introductions solely for custody to an authorised or exempt person. There is no general offer-introducer exemption.

Introducing a Saudi prospect in relation to a tokenised fund interest can itself constitute arranging. A meeting, deployment or subscription fee makes the business and remuneration evidence stronger. Fee form alone does not alter the definition; a genuinely product-neutral social handoff may fall outside arranging on its facts.

Institutional and qualified clients

An institutional client includes the Government and recognised supranational authorities, government-owned companies, qualifying wholly owned companies, investment funds, counterparties and a legal person acting for its own account with net assets above SAR 50 million.

Natural-person qualified-client status can arise through any of seven alternatives. They are at least ten securities-market transactions per quarter over the prior twelve months totalling at least SAR 40 million; net assets of at least SAR 5 million; three years in a relevant professional financial position; a recognised securities-business professional certificate; the recognised General Securities Qualification Certificate plus annual income of at least SAR 600,000 in each of the last two years; qualifying discretionary management; or status as a registered person of the offering institution.

A legal person can be qualified where, among other routes, it acts for its own account and has net assets of at least SAR 10 million and not more than SAR 50 million, or a qualifying discretionary manager represents it. A wholly owned company can derive status from its qualifying owner. Anyone else is retail.

Foreign-fund private placement

Under the 2025 Investment Funds Regulations, a foreign fund’s securities may be offered in the Kingdom only through a Saudi distributor and by private placement. The distributor must be a capital market institution with the specified dealing or management authorisation. The foreign fund manager must be authorised in a jurisdiction the CMA considers to have regulatory standards at least equivalent to Saudi standards.

Recipients may be institutional or qualified clients, or retail clients subscribing no more than SAR 200,000 each. Saudi retail cash subscriptions must also not exceed fifty per cent of the fund’s total cash subscriptions. The distributor must notify the Capital Market Authority at least fifteen days before the proposed offer and provide the prescribed declarations, terms, offering documents and due-diligence material. Promotional material may be sent only to persons lawfully eligible for the placement. It must state that distribution is restricted, the Authority has not approved or verified the document, the investor must conduct due diligence, and authorised advice should be obtained if necessary.

The simplified investment-fund instructions adopted on 2 March 2026 create a lighter domestic institutional fund, still requiring a capital market institution manager, notification, restricted advertising, local custody and a licensed distributor. They do not create an offshore cold-outreach exemption.

Saudi securities advertising, reverse requests and crypto measures

A securities advertisement is broadly a verbal, electronic or written business communication concerning securities or securities activity that invites or induces. It may be communicated to a person in the Kingdom only by a capital market institution or after approval by one. Internet material available in the Kingdom is deemed communicated there unless, on its content and circumstances, it is directed solely outside the Kingdom. There is no broad institutional-client advertising exemption.

The CMA recognises a narrow reverse-request route for a foreign regulated institution from an acceptable comparable jurisdiction. The institution may serve only a qualifying “investment company” or a natural person with investments or net assets of at least SAR 50 million. The client must have initiated the activity, no Kingdom marketing may have occurred, and the activity cannot concern most Saudi securities. The route provides no general foreign-fund reverse-solicitation exemption. Intermediary contact, a teaser, link, return discussion or meeting invitation defeats the central factual premise.

Saudi Arabia has no general locally licensed retail cryptocurrency regime. Official warnings state that virtual currencies are not approved official currencies and no local person is generally licensed for such practice; the warnings do not impose a blanket statutory ownership ban. The Capital Market Authority’s FinTech Lab permits case-specific experimentation in securities-related financial technology. CMA material identifies distributed-ledger-based securities arranging and custody, initially involving sukuk, and fund-unit distribution platforms. An experimental permit applies only to its holder and approved model. Wholesale central-bank-digital-currency testing continues, but the Saudi Central Bank has made no decision to issue a retail Saudi digital currency.

The April 2026 consultation on experimental-permit rules, the May 2026 licensing consultation and the earlier offshore securities-business licence proposal remained proposals at the research cut-off. None created a generally available cross-border passport.

Anti-money-laundering

Capital market institutions must comply with the Anti-Money Laundering Law and the Combating-Terrorism Crimes and Financing Law. Duties include new-product and technology risk assessment, customer due diligence, beneficial-owner verification, monitoring, records and suspicious-transaction reporting. Targeted-financial-sanctions rules include digital currencies and virtual assets as property and require prompt freezing and prohibitions on making funds available.

MEXICO

Mexico permits private offers of unregistered securities under article 8 of the Securities Market Law, including offers confined to institutional or qualified investors. That issuer-level exemption is separate from the rules on habitual or professional intermediation, personalised advice and referral remuneration. Uncontrolled internet promotion can place an offer within the public-offer perimeter. Mexico does not have a MiCA-style investor-facing crypto regime; security tokens remain subject to securities law, while virtual-asset functions can engage financial-institution and anti-money-laundering rules.

Security and public-offer perimeter

The Securities Market Law defines securities broadly as shares, partnership interests, debt instruments and other serially or mass-issued instruments that represent capital, a proportional part of an asset, participation in a collective credit, or an individual credit right. A pro-rata tokenised interest in a managed pool can therefore be a security even if it is recorded onchain and called a cryptoasset.

Article 2 defines a public offer as an offer made in Mexico through mass media to an indeterminate person to subscribe, acquire, dispose of or transfer securities. A campaign can still be public when directed at an apparently narrow class if its dissemination and audience are not genuinely controlled. Article 6 separately requires prior approval from the National Banking and Securities Commission for public promotional, commercial or advertising information about securities. The message must match the authorised prospectus.

Article 8 permits a private offer of unregistered securities in Mexico where one of the stated conditions is satisfied. The relevant conditions are an offer exclusively to institutional or qualified investors; an equity or equivalent offer to fewer than one hundred persons, regardless of class or series; certain employee plans; or offers to owners of an entity whose principal object is transactions with those owners. The National Banking and Securities Commission may authorise other private offers after considering dissemination, the number and type of offerees, distribution, terms and other factors.

The institutional or qualified route is the principal article 8 route for many tokenised offerings. The “under one hundred” limb is drafted for equity and equivalent instruments and does not necessarily extend to a redeemable tokenised fund interest. Article 8 expressly permits any person to make a compliant private offer of unregistered securities. Article 9 separately reserves intermediation in registered securities and limits authorised intermediaries’ handling of unregistered securities to shares; it also channels qualifying foreign securities through the International Quotation System. The statute therefore does not establish a simple licensed-placement route for every unregistered fund or tokenised interest.

Qualified and institutional investor criteria

An “institutional investor” includes the financial institutions and other professional entities identified by statute and regulation. A “qualified investor” is a person that habitually maintains the income, assets or qualitative characteristics established by the National Banking and Securities Commission. Under the operative secondary criteria, the basic financial tests are generally an average investment in securities of at least 1,500,000 Investment Units during the prior twelve months, or gross annual income of at least 500,000 Investment Units in each of the prior two years. A “sophisticated qualified investor” generally satisfies the higher 3,000,000 Investment Unit portfolio or 1,000,000 Investment Unit income threshold.

An Investment Unit, or UDI, is an inflation-indexed unit of account whose peso value changes daily. Qualification is tested using its value on the relevant date. A family-office label does not itself establish qualified-investor status; the contracting person must satisfy a regulatory category.

Intermediation and advice

Article 2 of the Securities Market Law treats habitual or professional conduct as securities intermediation when it performs any of three functions. The functions are bringing supply and demand for securities together, executing securities transactions for third parties, and dealing for one’s own account with the public or intermediaries. Article 8 permits any person to make a compliant private offer, while article 9 separately imposes channel rules. Authorised intermediaries may intermediate unregistered securities only where they are shares. Specified foreign securities susceptible to listing in the International Quotation System must use that system. A private offer can therefore be lawful at issuer level while an intermediary’s habitual or professional conduct remains separately regulated. Retaining a licensed intermediary does not automatically solve placement of an unregistered non-share tokenised fund interest.

Article 225 treats a person as an investment adviser where it habitually or professionally manages securities portfolios or gives individualised investment advice, analysis or recommendations. Article 227 prohibits an investment adviser from receiving remuneration from an issuer for promoting its securities and from a domestic or foreign securities intermediary for referring clients or transactions. A factual, product-free introduction is less likely to meet the adviser description. Repeatedly presenting a specific tokenised investment product, selecting suitable prospects, answering investment objections, negotiating a subscription or receiving deployment-linked compensation supports adviser classification. Fixed compensation removes transaction linkage as one indicator. It provides no statutory safe harbour.

Cryptoassets, financial institutions and anti-money-laundering

The Financial Technology Institutions Law regulates crowdfunding institutions and electronic-payment-fund institutions. It also gives the Bank of Mexico authority over virtual assets used internally by regulated financial institutions. The financial authorities have repeatedly stated that Bitcoin, Ether and similar assets are not legal tender or foreign currency and that financial institutions may not offer public virtual-asset exposure without the required authorisation. A token with security-like rights is assessed under the Securities Market Law rather than exempted by being digital.

For non-financial persons, article 17(XVI) of the Federal Law for the Prevention and Identification of Transactions with Illicit Proceeds treats the habitual and professional offer of virtual-asset exchange through electronic or digital platforms as a “vulnerable activity.” The July 2025 reform strengthened identity, beneficial-owner, originator and beneficiary information, risk-assessment, recordkeeping and reporting duties. The Tax Administration Service requires covered providers to enrol in the anti-money-laundering portal and file reports at the statutory Unit of Measurement and Update thresholds. An introduction to a security alone is not a virtual-asset exchange. Accepting stablecoins, minting or redeeming project tokens, or arranging exchange for Mexican users requires separate functional classification.

PERU

Peru recognises institutional-investor and indexed high-denomination private-offer routes, which do not exempt habitual securities intermediation. A family-office label does not establish institutional status. Pension-fund administrators and insurers remain subject to separate prudential investment limits and eligible-asset rules.

Security, public offer and private-offer routes

The consolidated Securities Market Law applies to securities offered or traded in Peru. Article 3 covers mass-issued, freely negotiable securities that confer credit, ownership, patrimonial, capital, asset or profit-participation rights. Article 4 defines a public offer as an adequately disseminated invitation addressed to the public generally or to a segment of it to place, acquire or dispose of securities. A token can satisfy the economic definition regardless of its ledger.

Article 5 recognises three principal private routes. The first is an offer exclusively to institutional investors; securities acquired under it may generally be transferred only to another institutional investor or after public registration. The second route has a statutory base of PEN 250,000, subject to annual indexation under the First Final Provision. For 2026, the applicable minimum nominal or unit placement value is PEN 578,563. The original acquirer may not transfer the security in a smaller nominal or placement unit. The securities regulator may prescribe additional private-offer cases. Private offers remain outside public-offer supervision, subject to the issuer’s and distributors’ duty to prove the exemption and comply with other law.

Article 8 includes banks, finance companies, insurers, broker-dealers, private-pension-fund administrators, fund managers and similar foreign entities within the institutional category, together with other persons designated by the Securities Market Superintendency. For 2026, a natural person within Annex 1, paragraph 6 of the Institutional Investors Market Regulation must have net worth above PEN 4,628,501 and a securities portfolio of at least PEN 2,314,250. Classification is made at the time of the offer using the then-current indexed figures.

Intermediation and investment conduct

Article 6 treats buying, selling, placement, distribution, brokerage, commission or negotiation for third parties as securities intermediation when carried out habitually. The law also captures habitual own-account acquisition intended for placement to the public for a spread. Articles 166 and 167 reserve intermediary activity to authorised securities agents and make unauthorised activity subject to serious sanctions, including potential criminal consequences.

Peru focuses on the function and whether it is a business. A single social introduction with no product message is at the low end. Repeatedly bringing investors to a specific investment product, presenting its merits, negotiating participation and receiving a meeting or deployment fee is much closer to placement or commission business. Institutional status resolves the public-offer question only. Habitual intermediation remains separately regulated.

Peruvian pension-fund administrators, known as AFPs, and insurers invest under sector-specific portfolio, rating, concentration, custody and eligible-asset rules. The Superintendency of Banking, Insurance and Private Pension Fund Administrators oversees those rules. Institutional-investor status does not by itself establish prudential eligibility to acquire a particular offshore token.

Virtual-asset service providers and anti-money-laundering

Peru has not enacted a single cryptoasset offering and licensing code equivalent to the European Union’s Markets in Crypto-Assets Regulation. Security-like tokens remain subject to the Securities Market Law. Supreme Decree 006-2023-JUS and Superintendency Resolution 02648-2024 place domestic virtual-asset service providers within the financial-intelligence anti-money-laundering regime. Covered activities include exchange between virtual assets and fiat currency, exchange between virtual assets, transfer, custody or administration, and participation in or provision of financial services related to an issuer’s offer or sale of a virtual asset. Covered providers need a prevention system, compliance officer, customer identification, records, suspicious-transaction reporting and phased originator/beneficiary information controls.

The territorial treatment of minting or redeeming a project token for a Peruvian investor depends on the functions and connecting facts. Foreign smart-contract deployment alone does not exclude targeted Peruvian activity.

CHILE

Chile provides private and exempt-public offering routes with detailed controls over audience, communications, legends and evidence of investor status. Publicly accessible internet promotion is generally inconsistent with the private-offer route. The Financial Technology Law places cryptoassets and virtual financial assets within its broad financial-instrument definition. It regulates professional intermediation, investment advice and related platform services.

Private offers and exempt public offers

Article 4 of the Securities Market Law treats an offer directed to the public generally, to sectors or to specific groups as a public offer, subject to rules issued by the Financial Market Commission. General Rule 336 identifies offers that are not public where the communication controls and investor conditions are met. The offer must not use mass media. Publicly accessible internet content directed from or at Chile is mass communication; an identified email, call, meeting or genuinely restricted-access site can be private.

The most relevant route is an offer directed exclusively to qualified investors in categories 1 through 6 under General Rule 216. A second route permits no more than 250 recipients over twelve months, principally category 7 and 8 qualified investors, with no more than fifty non-qualified recipients included in that 250. A third route permits no more than fifty non-qualified recipients. Separately, where the security’s unit value is at least 3,000 Units of Account, the offer need not satisfy one of those recipient-category conditions, although the communication, information and safeguard conditions remain. The Unit of Account, or UF, is Chile’s inflation-indexed unit and must be valued on the relevant date.

General Rule 336 requires prescribed warnings that the securities and issuer are not registered or supervised, that public information duties do not apply, and that the securities cannot be publicly offered. The offeror must identify offerees, verify status and preserve evidence. General Rule 452 separately creates exempt public offers, including certain qualified-investor-only, exchange, large-percentage and employee routes. An exempt public offer remains distinct from a private offer and can carry notice, disclosure and legend obligations.

Qualified-investor criteria

General Rule 216 includes regulated institutional investors; qualifying foreign banks, insurers, fund managers and intermediaries; brokers; persons or entities with financial investments of at least 10,000 UF; and qualifying managed accounts. Its broader category 8 can include a person with at least 2,000 UF of financial investments who also satisfies one of the prescribed wealth, experience or professional-knowledge conditions. Those alternatives include total assets of at least 100,000 UF; individual transactions of at least 1,000 UF at a minimum frequency of twenty transactions per quarter during each of the preceding four quarters; or relevant education or professional experience, together with the authorised intermediary’s process and investor declaration.

A family-office label does not establish qualified-investor status; status turns on the contracting person meeting a category and the prescribed evidence.

Financial Technology Law treatment of cryptoassets, advice and intermediation

Law 21,521 defines a cryptoasset as a digital representation of units of value, goods or services, other than money, that can be transferred, stored or exchanged digitally. It defines “financial instrument” broadly to include contracts, documents and intangible assets designed to generate monetary returns or represent debt, including unregistered securities and virtual financial assets. The regulated services include crowdfunding platforms, alternative transaction systems, order routing, intermediation, custody and investment advice.

Investment advice includes evaluations or recommendations to third parties concerning investments or transactions in securities, financial instruments or projects. Intermediation includes buying or selling financial instruments for third parties, including matched-principal activity. Article 5 generally requires registration in the Financial Services Providers Registry for professional provision of those services. Foreign providers ordinarily require the prescribed Chilean presence. Current General Rule 502, section C.3, permits a foreign entity to be exempt from the Chile-domicile requirement if it satisfies the ten-year clean-record condition and provides Chile services only to qualified investors. The entity must make and annually update the prescribed declaration. The exemption creates no general passport; registration and any required service authorisation remain. The proportionality power can reduce some requirements but does not erase the registration perimeter.

Offshore services can still be treated as provided in Chile where they are physically performed there or communications target persons in Chile. The Financial Market Commission has treated genuinely offshore contracting or genuine reverse solicitation, without Chile targeting, as outside the Chile service perimeter on the facts considered.

General Rule 502 implemented the registration and conduct regime, with the principal transition ending on 3 February 2025. Later rules refine how traditional regulated institutions notify and conduct Fintech Law services; they do not create a blanket foreign-introducer exemption. Registered providers also face management, information-security, suitability or disclosure, conflict and anti-money-laundering requirements tied to their functions.

PANAMA

Panama can be relevant as the investor’s location and as the place of incorporation, management or operations. Article 180’s private-investment-company route applies only where participation interests are not offered in Panama and carries representative, notice, legend and annual-certification requirements. Separately, investment-management business conducted “in or from” Panama generally requires a licence. Private-offer treatment and licensing of managers, advisers, brokers and distributors remain distinct.

Security and territorial offer rules

The Securities Market Law regulates public offers and sales of securities in Panama. Article 128 treats an offer made to a person domiciled in Panama as an offer in Panama even if the sender is abroad. Panama origin alone does not bring an offer made solely to a person outside Panama within the Panama offer rules. Internet communications are assessed under their accessibility, targeting and safeguards.

Article 129 exempts, among other matters, a private placement made to no more than twenty-five offerees with sales to no more than ten persons during a one-year period, and an offer to institutional investors. The offeree and purchaser limits aggregate the entire offering across all sources during the stated period. Agreement 1-2001’s institutional category includes licensed banks, insurers and reinsurers, registered investment companies, specified trusts and pension funds, securities houses, sovereign or public entities, and certain experienced Panama legal persons. The latter generally need at least two years’ habitual investment-management activity, audited net worth of at least PAB 1 million and experienced senior decision-makers, together with a written certification. The balboa is legally at parity with the United States dollar.

Private or institutional status can remove security-registration and public-offer approval for the transaction. Licensing may still be required for a securities house, investment adviser, broker or investment manager performing the activity.

Investment companies and the article 180 private route

Article 157 generally requires registration for an investment company that publicly offers participation interests in Panama or is administered in or from Panama, unless it qualifies as a private investment company. Article 158 states when an investment company is administered in or from Panama. Connecting facts include appointing a Panama investment manager or custodian, locating the principal domicile in Panama or presenting it that way, or having the decision-making quorum of directors or equivalent decision-makers domiciled in Panama. Incorporation in Panama by itself is expressly insufficient; actual operations and decision-making matter.

Article 180 defines a private investment company as one administered in or from Panama whose participation interests are not offered in Panama and whose constituting document contains one of the statutory restrictions. The first alternative limits beneficial owners to fifty or requires offers by private communication rather than public media. The second limits offers to qualified investors with a minimum initial investment of PAB 100,000. For this purpose, a qualified investor includes a person whose ordinary business involves dealing in the types of securities or property held by the vehicle, or a person signing a declaration of at least PAB 1 million net worth, individually or jointly with a spouse, and consenting to qualified treatment.

Article 181 requires a Panama representative and delivery of constituting documents, the offering document, audited financial statements, evidence of existence, appointments and service-provider information. Article 182 requires notice through a Panama lawyer before operations, a prescribed non-registration legend, and an annual compliance certificate before 30 June. The vehicle remains unregistered, while the Superintendency retains protective and enforcement powers.

Investment-manager and distribution licensing

Article 184 provides that only a person holding an Investment Manager Licence may conduct the investment-manager business in or from Panama, whether the investment company is registered or unregistered. It also reaches managers of investment companies publicly offering in Panama even when the manager acts abroad. Article 187 allows only case-specific or general relief from exact compliance with some requirements on an equivalent-protection showing. That relief does not operate as a self-executing foreign-manager passport or licence exemption.

Panama also licenses securities houses, brokers and investment advisers. A person that repeatedly promotes a specific participation interest, recommends it, negotiates subscriptions or is paid per deployment may be conducting regulated activity even where the sale itself is exempt. An issuer-level private-offer exemption does not itself exempt an intermediary, adviser, broker or manager from the applicable licensing perimeter.

Cryptoassets, anti-money-laundering and pending legislation

Panama has not enacted a virtual-asset-service-provider code equivalent to the European Union’s Markets in Crypto-Assets Regulation. The Superintendency has historically stated that spot cryptoassets lacking security characteristics can fall outside its securities jurisdiction, while reserving jurisdiction where the instrument satisfies the statutory securities definition. A non-custodial Bitcoin or Ether interface therefore provides no precedent for a pro-rata net-asset-value participation token. Whether such a token is a “participation quota” or other security under article 49 is fact-specific.

Law 23 of 2015 imposes anti-money-laundering duties on listed financial and non-financial obligated subjects. The absence of a crypto-specific licence does not prove that every crypto or tokenised-fund function is outside existing sector-based categories. Duties attach according to the functions performed and the statutory obligated-subject categories.

Two virtual-asset bills remained unenacted at the research cut-off. The National Assembly reported in January 2026 that Bill 326, addressing registration and supervision of virtual-asset service providers for anti-money-laundering purposes, was under subcommittee review. It separately reported continuing work on Bill 247, a broader crypto-economy measure. In July 2026 the Superintendency again described the regulatory gap and associated risks. The bills created no present authorisation or obligations.