Before getting into the analysis of how an STO would be subject to the US securities regulations under the Securities and Exchange Commission's (SEC's) radar, first let's look at an overview of the US securities laws that govern securities offered or sold in the US.
The first issue is jurisdiction—whether the offer and sale of security is subject to regulation in the US.
For an issuance of security to be subject to US federal and state securities, such issuance should be targeted toward potential US purchasers. Hence, for an STO to be regulated under US securities laws, the STO should be exposed to public or targeted purchasers in the US.
The offer and sale of securities in the US are regulated under both federal and state laws. In some types of offerings, the federal laws will preempt the state laws. For other types of offerings...