Why the SEC Thinks Most Tokens Are Securities
When the SEC Thinks a Token Might Stop Being a Security1

August 1, 2018

A common misconception in the cryptocurrency community has been the belief that because a digital cryptocurrency or other crypto asset ("token") is intended to have utility in the future, it is not a security at the time it is issued. That belief reflected a basic misunderstanding of the "Howey test," which is the principal test for analyzing whether most tokens are securities.2 The Howey test looks to the current status of an instrument, not its future promise, in evaluating whether the instrument is a security. Nonetheless, the Howey test at least leaves open the seemingly strange possibility that a token can begin its life as a security, but eventually evolve into a non-security. Recently, a high-ranking Securities and Exchange Commission ("SEC") official not only confirmed that he thought this can happen, but even gave examples of factors that may help in determining when a token that was a security may no longer be a security.

This article provides an overview of why the SEC and its staff ("Staff") consider most tokens to be securities,3 and the circumstances under which the Staff believes some tokens eventually may no longer be securities.4

A. Treatment of Tokens as Securities

1. Why are tokens securities?

The SEC and the Staff take the position that almost all tokens, as they are typically structured, are securities under the Securities Act of 1933 (the "Securities Act") because they meet the definition of an "investment contract."5 Under Section 2(a)(1) of the Securities Act (and similar provisions in the other federal securities laws), the term "security" is defined through a list of instruments that includes, among other things, "investment contracts."6 Although Section 2(a)(1) does not list the terms "tokens" or "coins" or any similar item as a security, the term "investment contract" has been used by the federal courts and the SEC as a catchall for other types of security interests not explicitly encompassed by the list in the Securities Act and the other federal securities laws.7 The SEC has indicated that it views tokens as securities based on an analysis of the tokens as investment contracts under SEC v. W.J. Howey Company8 and subsequent cases.9 In Howey, the Supreme Court found that an instrument meets the definition of an "investment contract" under the Securities Act if it involves "an investment of money in a common enterprise with profits to come solely from the efforts of others."10

In an offering of tokens or DDATs (a "Token Offering"), investors invest money or another form of value in exchange for the right to receive tokens, either immediately or in the future. The instrument may involve a "common enterprise" because (among other reasons) money is pooled and used to finance the development, marketing, and deployment of the issuer's platform, and any success is often common to investors and the issuer.11 Many investors will purchase tokens with the expectation of receiving profits, which are tied to the success or failure of the platform. Token purchasers primarily depend on the issuer's efforts developing, marketing and maintaining the platform for that success. Based on these features of the tokens and how they are typically offered, the SEC has apparently concluded that most (if not all) tokens will be investment contracts and therefore securities.12

2. Is it possible that a company's tokens can transition from securities to non-securities at some point in time?

It is possible that once the value of a token is primarily driven by the token's commercial usage, rather than by the centralized efforts of a token issuer, the token will no longer meet the conditions described in Howey and thus will no longer constitute a security. Precisely when a token transitions to a non-security in these situations is unclear. In general, it is likely that it will occur at some point when the platform is "sufficiently decentralized"13 and the principal driver of a token's value is its commercial usage on one or more mature and operational token platforms (i.e., when there are many users and service providers on the platform and the issuer's efforts developing, marketing, and maintaining the platform are no longer a significant driver of the tokens' value).14 In contrast, as long as a token's value is principally driven by the entrepreneurial or managerial efforts of a centralized source (such as the issuer, affiliates of the issuer, or other identifiable third-party expending managerial efforts), or speculation by other investors, the token will likely remain a security.15

If a token may transition to a non-security, it is also possible that the efforts of the issuer—or a third party, such as a third party responsible for a significant "fork"—can result in a token transitioning back into a security.16 If, for example, the issuer decides to develop a new feature on its platform or provide a significant technological development to the underlying blockchain, the value of the token may return to depending more on the efforts of the issuer than the commercial demand for the underlying good or service.

3. Did the SEC recently change its mind on whether most tokens are securities? (Spoiler alert: No)

In June 2018, the Director of the Division of Corporation Finance, William Hinman, released a statement (the "June 2018 Remarks") outlining certain guiding factors for issuers to consider in determining whether their tokens constitute securities,17 and listed several factors for an issuer to consider in determining both whether a token is a security and when a token that was a security may no longer be a security. Director Hinman also stated that, in his view, Bitcoin and Ether are not securities, although he did not identify the factual characteristics of Bitcoin and Ether that led him to conclude that neither of them are securities.

Anecdotally, it appears that some people in the cryptocurrency community interpreted the June 2018 Remarks as suggesting the SEC had changed its view that most tokens are not securities. A number of people also seem to believe that the SEC may now be amenable to issuing no-action letters to individual token issuers declaring that their tokens are not securities. We think people who take these positions likely are misinterpreting Director Hinman's comments.

First, Director Hinman suggested that factors issuers should consider in determining whether their tokens are securities include, among others, whether the issuer or its affiliates (together with, as applicable, any members of the founding, management or development teams, (the "Sponsoring Parties")):

  1. Play a significant role in the development and maintenance of the tokens and their potential to increase in value;
  2. Have retained a stake or other interest in the tokens so that the Sponsoring Parties have financial incentives to increase the value of the tokens (and whether purchasers of the tokens reasonably believe the Sponsoring Parties will undertake these efforts);
  3. Raise an amount of funds in excess of the amount needed to make the platform fully functional (and may also promise that any excess funds raised will be used to support the value of the tokens or to increase the value of the platform or may continue to expend funds from the proceeds of any Token Offering or operations of the platform for those purposes); or
  4. Market and sell the tokens to the general public rather than to potential users of the platform.18

These factors, of course, are not meant to replace the Howey test; they are meant, we believe, to help further the Howey analysis (even Director Hinman cannot overrule the Supreme Court's Howey decision). The first two factors, for example, go to the prong of the Howey analysis focusing on whether token purchasers are relying on the efforts of the Sponsoring Parties. The third factor also goes to this prong of the Howey analysis. The fact that a Sponsoring Party raises sufficient money to continue supporting the platform for some time after the initial issuance of the tokens suggests that purchasers of those tokens reasonably are or may be relying on the continuing efforts of one or more of the Sponsoring Parties to maintain, market, support and develop the platform.

The fourth factor, which looks to whether the tokens are marketed and sold to the general public rather than to potential users of the platform, goes to the prong of the Howey analysis focusing on whether purchasers are buying the tokens with an expectation of profits. If the tokens are principally purchased by people who want to use the tokens for commercial purposes on the platform, there is a reasonable argument that these people are not purchasing the tokens with an expectation of profits. As Director Hinman points out, however, a broad-based sale such as a public offering suggests that many purchasers are buying tokens with a speculative, investment intent—or an expectation of profits—rather than with the intent to use the tokens for commercial purposes.

As Director Hinman said, these factors are not the only factors. Indeed, these factors go only to two of the four prongs of Howey. More importantly, the Howey test still stands, and the question a token issuer must ask is whether its tokens are securities under Howey, not under the four non-exclusive factors set forth by Director Hinman.

Second, Director Hinman also listed certain factors that are helpful indications of when a token that was a security may no longer be a security.19 These factors include, among others, whether:

  1. Creation of the tokens is commensurate with meeting the needs of users of the platform rather than for feeding speculation;
  2. Independent actors are setting the price of the tokens or if the Sponsoring Parties are supporting or influencing secondary trading in the tokens;
  3. The primary motivation for purchasing the tokens is for personal use or consumption rather than investment, and the purchaser has made representations that they intend to personally use or consume the tokens (in addition, Sponsoring Parties should consider whether the number of tokens purchased by a user correlates to the number of tokens needed for personal use or consumption on the platform);
  4. The tokens are distributed in a way that meets users' needs (e.g., the tokens can be held or transferred only in amounts that correspond to a purchaser's expected use and the tokens have built-in incentives for users to use the tokens on the platform rather than hold the tokens for investment purposes);
  5. The tokens are held by a diverse user base rather than concentrated in the hands of a few token holders that can exert influence over the platform; and
  6. The platform is fully functioning rather than still in development.20

In our view, it is unlikely that many tokens could meet the factors set forth by Director Hinman prior to the time there is a public offering of the tokens. Among other reasons, it may be difficult for independent actors to set the price of tokens and for the related platform to be fully functioning prior to the time there are publicly offered and freely transferable tokens that can be used on the platform.21 We also are cautious because of all the tokens the SEC and the Staff have examined, to date the Staff has indicated it believes only two tokens—Bitcoin and Ether—are not securities.22 Both of these tokens, of course, have many years of trading and operational history.

Third, although Director Hinman did not discuss the availability of no-action relief to individual token issuers, we are aware that a number of participants in the cryptocurrency community are hopeful that they can receive no-action letters to the effect that their tokens are not securities. While we cannot rule out the possibility of some type of no-action relief, especially for truly unusual tokens or platforms or for groups of tokens and platforms meeting specified criteria, we think it is unlikely that the Staff will begin issuing no-action letters to many individual token issuers.

As previously discussed, the Staff appears to continue to view most tokens as securities, and therefore the Staff is likely to disagree with most requests for no-action relief. In addition, it appears that among the factors that the Staff would look at in deciding whether a particular token is or is not a security are those that Director Hinman discussed, and it is not clear that many token issuers in the United States currently have the type of data necessary to show that some of those factors weigh in favor of a non-securities determination. More generally, the Staff likely is concerned that it lacks the resources to deal with the potential torrent of no-action letter requests it would get from token issuers if the Staff started considering and granting these requests on an issuer-by-issuer basis.

Finally, at the risk of repetition, SEC Chairman Clayton and the Staff repeatedly have said that in their view most tokens they have seen are securities. Any token issuer that seeks a no-action letter—or indeed any token issuer that seeks to take the position that its tokens are not securities—needs to be able to articulate, under the Howey analysis, why its tokens are sufficiently different from most other tokens to cause its tokens alone to not be securities.

As a result, when a token issuer is designing its tokens, Token Offering and platform, we believe the best approach is to generally assume the tokens are and will be securities for some time, and to develop a strategy to promote a liquid and vibrant token economy on the platform that is fully in compliance with the securities laws.

4. What are the potential consequences if a company does not treat its tokens as securities?

Token issuers that fail to treat their tokens as securities risk being penalized by federal or state regulators or sued individually or collectively by private litigants.23

The SEC has placed market participants on notice not only that many tokens are securities but also that the SEC intends to rigorously enforce federal securities laws.24 The Staff has indicated that it intends to pursue pure registration failures, in addition to cases involving fraudulent conduct.25 To date, the SEC has not brought actions against token issuers for substantive securities law violations not involving fraud (except in the Munchee Order, which did not impose sanctions). Statements by the SEC Staff suggest that they do intend to bring these types of actions in the future.26

To police illegal securities offerings, the SEC or the U.S. Department of Justice may impose civil and/or criminal penalties on issuers or persons that violate federal securities laws. These penalties can include, among others, the imposition of fines, civil monetary penalties and the forced return of illegal gains. In addition, the SEC may also bar or suspend an individual from serving as a corporate officer or director.27

Token issuers that fail to treat tokens as securities also risk state regulatory action. The North American Securities Administrators Association ("NASAA") and several state regulators have announced a significant number of investigations and enforcement activities arising from tokens and/or Token Offerings.28

Private plaintiffs may seek damages against issuers of tokens for the offer and sale of a security in violation of the registration provisions of the Securities Act, which may include punitive damages as well as costs for attorneys' fees.29 A number of private plaintiffs have already filed complaints against token issuers for offering and selling securities in violation of the securities laws.30 Although these actions are currently unresolved, they may give rise to considerable litigation costs and potential civil damages and other penalties.

A token issuer that is subject to regulatory and/or private action may also subsequently be subject to potential treatment as a "bad actor" under the securities laws. This could, among other things, prohibit the issuer from conducting a private offering of its securities (including not only tokens, but other securities) and registering securities in future offerings with the SEC.31

1 This article was principally prepared by Robert Rosenblum, Amy Caiazza, Julie Krosnicki and Aaron Friedman. Rob is a partner, and Amy, Julie and Aaron are associates, of WSGR. This article expresses the views of the authors, and does not necessarily represent the view of the authors' colleagues at WSGR or the views of clients of WSGR.
2 SEC v. W. J. Howey Co., 328 U.S. 293 (1946).
3 In many cases, tokens are sold on a delayed basis through a deferred delivery agreement that is designed to give purchasers the right to receive those tokens in the future, such as simple agreements for future tokens, or "SAFTs." We refer to these types of agreements collectively as "Deferred Delivery Agreements for Tokens" (or "DDATs"). If the tokens to be delivered pursuant to a DDAT are securities, the DDAT almost certainly is a security as well.
4 See, e.g., SEC v. Sohrab Sharma & Robert Farkas, Compl. at 5, 1:18-cv-02909 (S.D.N.Y. Apr. 2, 2018), ("Each of the investments offered in the Centra ICO . . . is an investment contract and, therefore, a 'security'"); Testimony of SEC Chairman Jay Clayton before the U.S. Senate Banking, Housing and Urban Affairs Committee (Feb. 6, 2018) ("I believe every ICO I've seen is a security. . . . ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story."); Munchee, Inc., SEC Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 (Dec. 11, 2017) ("Munchee Order") (stating tokens issued were securities); SEC, Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO, Rel. No. 81207 (July 25, 2017) ("DAO Report") (finding that tokens issued by DAO were securities). See also generally The SEC Has an Opportunity You Won't Want to Miss: Act Now!, SEC Press Release (May 16, 2018), (announcing the SEC's introduction of a mock "" website intended to educate investors about fraudulent initial coin offerings ("ICOs")); Initial Coin Offerings, SEC (Mar. 27, 2018), (compiling a variety of SEC materials related to ICOs and digital assets); Investor Bulletin: Initial Coin Offerings, SEC (July 25, 2017),
5 The question of whether a token is a security is fact-specific, and there are some types of tokens that likely are neither investment contracts nor otherwise securities. An example of these may be non-transferable tokens that represent the pre-purchase of an identifiable good or service from an existing merchant. There also are some types of tokens that may not be investment contracts but that nonetheless are securities, such as tokens that are digital representations of equity or debt.
6 Securities Act §2(a)(1) (15 U.S.C. § 77b(a)(1)).
7 See, e.g., Landreth Timber Co. v. Landreth, 471 U.S. 681, 686 (1985) ("As we have observed in the past, this definition [of 'security'] is quite broad, and includes both instruments whose names along carry well-settled meaning, as well as instruments of 'more variable character [that] were necessarily designated by more descriptive terms,' such as 'investment contract'. . . .") (citations omitted) (quoting SEC v. C.M. Joiner Leasing Corp., 320 U.S. 344, 251 (1943)).
8 328 U.S. 293 (1946).
9 See Munchee Order, note 4 at 8-9 (finding MUN tokens constituted investment contracts under Howey); DAO Report, note 4 at 11-15 (determining DAO tokens constituted investment contracts under Howey).
10 238 U.S. at 301. Despite the "solely" language in Howey, subsequent case law has indicated that the appropriate analysis is whether investors "primarily" rely on the promoter. As the Ninth Circuit Court of Appeals has stated, the test is whether the "efforts made by those other than the investors are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise." SEC v. Glenn Turner, 474 F.2d 476, 482 (9th Cir. 1973). In 1975, the Supreme Court noted that it expressed no view on the findings in Glenn Turner. United Housing Found., Inc. v. Forman, 421 U.S. 849, 852 n.16 (1975).
11 It is possible that courts could take the position that a token does not involve a common enterprise and, thus, is not an investment contract. Different Circuit Courts use three different tests to determine whether an arrangement constitutes a common enterprise. Several courts apply the "horizontal commonality" test, which requires a pooling of investors' funds and sharing of profits and losses. See e.g., SEC v. Life Partners, Inc., 87 F.3d 536, 543 (D.C. Cir. 1996) ("horizontal commonality [is] defined by the pooling of investment funds, shared profits, and shared losses"); SEC v. Sg Ltd., 265 F.3d 42, 49-50 (1st Cir. 2001) ("horizontal commonality [is] the pooling of assets from multiple investors in such a manner that all share in the profits and risks of the enterprise"); Revak v. SEC Realty Corp., 18 F.3d 81, 87-88 (2d Cir. 1994) (same); Steinhardt Group v. Citicorp, 126 F.3d 144, 151-52 (3d Cir. 1997) (same); Teague v. Bakker, 35 F.3d 978, 986 n.8 (4th Cir. 1994) (same); Hart v. Pulte Homes of Michigan Corp., 735 F.2d 1001, 1004 (6th Cir. 1984) (same); Stenger v. R.H. Love Galleries, Inc., 741 F.2d 144 (7th Cir. 1984) (same). A court might decide that there is no horizontal commonality in a Token Offering if investors' funds are not pooled, and each investor's returns are in effect independent of the returns of any other investor.

The Ninth Circuit applies a "narrow vertical commonality" test, which requires investors' returns to be linked to the returns of the promoter. See e.g., SEC v. R.G. Reynolds Enters., 952 F.2d 1125, 1130-31 (9th Cir. 1991) (finding narrow vertical commonality satisfies second prong of Howey); SEC v. Glenn W. Turner Enterprises, 474 F.2d 476, 482 n.7 (9th Cir. 1973) ("A common enterprise is one in which the fortunes of the investor are interwoven with and dependent upon the efforts and success of those seeking the investment or of third parties."). A court in the Ninth Circuit might decide that there is no narrow vertical commonality in a Token Offering if, for example, the token issuer has no continuing financial stake in the tokens or the platform.

Finally, the Fifth and Eleventh Circuits apply a "broad vertical commonality" test, which requires investors' returns to be tied to the effectiveness of the promoter. See e.g., SEC v. Koscot Interplanetary, Inc., 497 F.2d 473, 479 (5th Cir. 1974) (deciding that "requisite commonality is evidenced by the fact that the fortunes of all investors are inextricably tied to the" issuer's successful efforts) and SEC v. Unique Fin. Concepts, Inc., 196 F.3d 1195, 1199-200 (11th Cir. 2002) (affirming formulation of common enterprise in Koscot). A court in the Fifth or Eleventh Circuit might decide that there is no broad vertical commonality in a Token Offering, if investors' returns are largely tied to persons other than the token issuer, which might occur on a widely decentralized token platform.

In practice, most tokens are offered and sold throughout the United States and are intended to be used throughout the United States. As a result, a token issuer that decides its tokens are not a security under the common enterprise prong of the Howey test likely would need to conclude that its tokens and platform did not create a common enterprise under any of these three tests.
12 The SEC's analysis does not generally appear to change in any significant way for protocol-layer and application-layer tokens.

It is important to note that the Howey test cannot be "passed" based on meeting a numerical threshold from a list of factors with arbitrarily assigned numerical values, and that a token does not immediately lose its status as a security simply because the related platform has become "operational."
13 Director William Hinman, Division of Corporation Finance, Digital Asset Transactions: When Howey Met Gary (Plastic), Remarks at Yahoo Finance All Markets Summit: Crypto (June 14, 2018) ("June 2018 Remarks"), (stating that "a [token] transaction may no longer represent a security offering . . . [i]f the [platform] on which the token or coin is to function is sufficiently decentralized—where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts").
14 If tokens are not securities, they may be considered derivatives or commodities. See Customer Advisory: Use Caution When Buying Digital Coins or Tokens, CFTC (July 16, 2018), ("Depending on the facts and circumstances, if initial buyers are told that the developers or promoters will bring them a return on their investments, or if the buyers are promised a share of future returns of the project, the digital coins may be securities and the offer and sale would be subject to federal securities laws. Digital tokens and coins can also be derivatives or commodities, depending on how they are structured."). This possibility is generally outside the scope of this article.
15 Many offers and sales of tokens are "investment contracts" because tokens are "often touted as assets that have a use in their own right, coupled with a promise that the assets will be cultivated in a way that will cause them to grow in value, to be sold later at a profit"; are "typically sold to a wide audience rather than to persons who are likely to use them on the network" by promoters that "overwhelmingly . . . tout their ability to create an innovative application of blockchain technology" and purchased by persons that "usually [have] no choice but to rely on the efforts of the promoter to build the network and make the enterprise a success"; and look "a lot like a bet on the success of the enterprise and not the purchase of something used to exchange for goods or services on the network." See June 2018 Remarks, note 12.
16 See June 2018 Remarks, note 12 (stating that "whether something is a security is not static and does not strictly inhere to the instrument"); Nikhilesh De & Mahishan Gnanaseharanm, SEC Chief Touts Benefits of Crypto Regulation, COINDESK (Apr. 5, 2018), (reporting a statement by SEC Chairman Jay Clayton that a token "can evolve toward or away from a security" and that "just because [a token is] a security today doesn't mean it'll be a security tomorrow, and vice-versa").
17 See June 2018 Remarks, note 12. While the June 2018 Remarks provide guiding factors for Sponsoring Parties (as defined below) to consider in structuring their Token Offerings, Director Hinman indicated that these factors will always depend on the particular facts and circumstances, and it is unclear how these factors will be interpreted in each case by the SEC.
18 See June 2018 Remarks, note 12.
19 See June 2018 Remarks, note 12.
20 See June 2018 Remarks, note 12.
21 While not entirely clear from Director Hinman's statement, it is unlikely that meeting any one of these factors is sufficient to cause a token to no longer be a security. Instead, we believe that Director Hinman's point was that a token that meets all or most of these factors, or exhibits similar characteristics, may no longer be a security.
22 While Director Hinman's views on the status of Ether as a non-security in the June 2018 Remarks do not necessarily reflect the views of the Staff, we believe it is reasonable to conclude that the views of Director Hinman—as the Director of the SEC's Division of Corporation Finance, which is primarily responsible for determining whether an instrument is a security or not under the Securities Act and the Exchange Act—are likely views that are shared by other members of the Staff.
23 This is not an exhaustive list of potential consequences. It is also possible, among other things, that a token issuer that does not treat its tokens as securities could be subject to alternative regulatory regimes, such as the money service business/money transmitter regulations under the Bank Secrecy Act of 1970 or the commodity-related regulations under the Commodity Exchange Act. A full analysis of these provisions is outside the scope of this article.
24 See SEC, Company Halts ICO After SEC Raises Registration Concerns, Press Release (Dec. 11, 2017) ("ICO Halts") (quoting Stephanie Avakian, Co-Director of the SEC's Division of Enforcement that "[the SEC] will continue to scrutinize the market vigilantly for improper offerings that seek to sell securities to the general public without the required registration or exemption").
25 Ben Hancock, "SEC Cyber Unit Chief Warns Steeper Penalties May Be Coming for ICO Issuers that Flout Rules," RECORDER, (May 10, 2018) ("Steeper Penalties") (quoting a "senior SEC official" as stating that there are "a number of investigations ongoing over ICOs, not only related to fraud but also 'purely registration issues'").
26 See generally note 4. See also ICO Halts, note 21 and Steeper Penalties, note 22.
27 See Securities Act §§20 & 22 (15 U.S.C. §§ 77t & 77v) and Exchange Act §§21 & 27 (15 U.S.C. §§ 78u & 78aa).
28 NASAA, "State and Provincial Securities Regulators Conduct Coordinated International Crypto Crackdown," NASAA, (May 21, 2018) (stating that NASAA members were pursuing more than 70 inquiries and investigations with 35 pending or completed enforcement actions, and, according to the president of NASAA, that these actions were "just the tip of the iceberg" with the NASAA's "ICO Taskforce" having identified approximately 30,000 crypto-related domain name registrations). See also, e.g., "Maryland Attorney General's Office Issues Cease-and-Desist against Windsor Mill Firm's Initial Coin Offering," Baltimore Sun (May 24, 2018); N.Y. State Office of the Attorney General, A.G. Schneiderman Launches Inquiry Into Cryptocurrency "Exchanges", Press Release (Apr. 17, 2018).
29 See Securities Act §§5, 12 & 15 (15 U.S.C. §§77e, 77l & 77o).
30 See Coffey v. Ripple Labs, Inc., et al., Compl., CGC-18-566271 (Superior Court of the State of California May 3, 2018), (alleging on behalf of class of plaintiffs that Ripple Labs, Inc. and related defendants violated securities laws in offering XRP tokens); Balestra v. ATBCOIN LLC et al., Compl., 1:17-cv-10001-VSB (S.D.N.Y. Dec. 21, 2017), (alleging on behalf of class of plaintiffs that ATBCOIN LLC and related defendants violated securities laws in offering ATB tokens).
31 See Rule 506(d) of Regulation D under the Securities Act (17 C.F.R. § 230.506(d)) (disqualifying an issuer from relying on Regulation D based on certain violations); Rule 262 under Regulation A under the Securities Act (17 CFR § 230.262) (same under Regulation A).