Rule 506(C)

Rule 506(c) is a specific exemption under Regulation D that allows issuers to broadly solicit and advertise their securities offerings, provided that all purchasers are accredited investors and the issuer takes reasonable steps to verify their status. This rule has become increasingly relevant for crypto projects looking to raise capital while maintaining a degree of public awareness.

Unlike 506(b), which prohibits general solicitation, 506(c) enables more open marketing, which is often necessary for reaching a wider base of potential investors in the digital asset space. The burden of verification is on the issuer, who must perform due diligence to confirm that each investor meets the accredited threshold.

This rule balances the need for effective capital raising with the requirement to protect non-accredited individuals from the risks associated with private, unregistered securities. It is a key tool in the professionalization of crypto fundraising.