Proposed Securities Act Rule 195- Time-limited Exemption for Tokens

Distributed ledger technology may be used to offer and sell digital assets, such as tokens, to raise capital and for other purposes. The SEC believes that in order for a trading network to mature into a functional or decentralized network, tokens must be distributed to and freely tradeable by potential users, programmers, and participants in the network. This proposed safe harbor is intended to provide initial development teams with a three-year time period within which they can facilitate participation in, and the development of, a functional or decentralized network, exempt from the registration provisions of federal securities laws so long as the conditions are met. The safe harbor is also designed to protect token purchasers by requiring disclosures tailored to the needs of the purchasers and preserving the application of the anti-fraud provisions of the federal securities laws.