General Solicitation Rules for Security Token Marketing

General solicitation — the ability to publicly advertise a securities offering to persons with whom the issuer has no preexisting relationship — is the critical marketing permission that makes Reg D 506(c) the dominant exemption for security token offerings. Before the JOBS Act legalized general solicitation for offerings to verified accredited investors in 2013, private placements could not be publicly marketed. For blockchain projects that depend on community awareness and network effects, general solicitation transformed the regulatory landscape from prohibitive to permissive. An estimated 78% of all digital asset Form D filings use 506(c), with the total Reg D market raising $2.15 trillion in 2024 and STO issuance growing from $5.6 billion to $6.66 billion between 2024 and 2025. The SEC’s Division of Corporation Finance issued staff guidance on April 10, 2025 clarifying disclosure requirements for crypto asset offerings, including that smart contract code should be included as an exhibit in filings. Understanding exactly what general solicitation permits, what it prohibits, and how FINRA advertising rules overlay SEC requirements is essential for every security token issuer.

What Constitutes General Solicitation

The SEC defines general solicitation broadly. Rule 502(c) identifies two categories:

General advertising. Any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media, or broadcast over television, radio, or the internet. This includes website advertisements, banner ads, and paid placements.

General solicitation. Any seminar or meeting whose attendees have been invited by general solicitation or general advertising. In the digital context, this includes webinars, AMAs (ask-me-anything sessions), Discord and Telegram announcements, Twitter/X posts, LinkedIn articles, YouTube videos, podcast appearances, and conference presentations — essentially any communication that reaches an audience broader than persons with whom the issuer has a preexisting substantive relationship.

Permitted Activities Under 506(c)

Under Reg D 506(c), general solicitation is fully permitted, provided that:

1. All purchasers are verified accredited investors through approved verification methods.
2. The offering otherwise complies with all 506(c) conditions (bad actor screening, Form D filing, etc.).

This means 506(c) issuers may:

• Publish offering details on their website, including token terms, valuation, and investment thesis.
• Advertise on social media platforms.
• Conduct public webinars and conference presentations discussing the offering.
• Engage marketing firms and paid promoters to solicit investors.
• List the offering on platform marketplaces like Securitize and Republic.
• Issue press releases announcing the offering.

Content Restrictions: What You Can and Cannot Say

While 506(c) permits general solicitation, all marketing content remains subject to federal and state antifraud provisions and FINRA Rule 2210 communications standards.

Prohibited Content

Guaranteed returns. No marketing material may promise or guarantee a specific return on investment. Statements like “earn 12% annually” or “guaranteed yield” violate antifraud rules regardless of the offering exemption.

Misleading technology claims. Claims about smart contract security, blockchain immutability, or technical performance must be accurate and substantiated. Overstating the security of the token’s technical infrastructure — particularly regarding custody or settlement — constitutes a material misrepresentation.

Omission of material risks. Marketing materials must not omit material risks. For security tokens, material risks include: liquidity limitations, Rule 144 holding period restrictions, smart contract vulnerability, platform dependency, and regulatory uncertainty.

Misleading comparisons. Comparing security token returns to cryptocurrency returns, equity market returns, or other investment performance without adequate context and disclaimers is prohibited.

Required Disclosures

Risk factors. All marketing materials should reference the offering’s risk factors or direct investors to the full PPM or offering memorandum.

Restricted security status. For Reg D tokens, marketing must disclose that the tokens are restricted securities subject to Rule 144 holding periods and ATS trading requirements.

Accredited investor limitation. Marketing should clearly state that the offering is limited to verified accredited investors.

FINRA Advertising Rules

Broker-dealers involved in security token marketing must comply with FINRA Rule 2210, which categorizes communications as:

Retail communications. Any written communication distributed to more than 25 retail investors within a 30-day period. This includes most digital marketing — website content, social media posts, email campaigns, and online advertisements. Retail communications must be approved by a registered principal before first use and must be filed with FINRA’s Advertising Regulation Department within 10 business days of first use for 506(c) offerings.

Correspondence. Written communication distributed to 25 or fewer retail investors within a 30-day period. Subject to principal review but not FINRA filing.

Institutional communications. Communications directed exclusively to institutional investors. Subject to supervisory review but not FINRA pre-use filing.

FINRA Content Standards

All communications must:

• Be fair and balanced — presenting both benefits and risks.
• Not contain misleading statements or omit material information.
• Include clear identification of the broker-dealer responsible for the content.
• Not make predictions or projections of investment performance.
• Not imply that FINRA or the SEC has approved or endorsed the offering.

Social Media and Digital Marketing

Security token marketing relies heavily on digital channels, creating specific compliance challenges:

Twitter/X and short-form content. Character-limited posts cannot contain all required disclosures. The industry standard is to include disclaimers in a linked landing page and to avoid making investment claims in the short-form post itself. Posts should state that the offering is available to accredited investors only and link to full offering materials.

Discord and Telegram. Community channels where offering-related discussions occur must be moderated to prevent non-compensated community members from making solicitation claims that could be attributed to the issuer. Community guidelines should prohibit return promises and price speculation.

Influencer marketing. Compensated promoters (influencers, YouTubers, podcast hosts) who receive payment or token allocations for promoting the offering are “compensated solicitors” under Rule 506(d) and must be screened for bad actor disqualification. Additionally, all paid promotions must disclose the compensation relationship, per SEC antifraud rules and FTC guidelines.

Email marketing. Targeted email campaigns to qualified investor lists are permissible under 506(c) but must comply with CAN-SPAM Act requirements and include unsubscribe mechanisms.

Interaction with 506(b) and Reg S

General solicitation under 506(c) creates integration risks when the issuer simultaneously conducts offerings under exemptions that prohibit solicitation:

506(b) conflicts. An issuer conducting a concurrent 506(b) offering (no solicitation permitted) and 506(c) offering (solicitation permitted) for the same security risks contaminating the 506(b) exemption. Rule 152 safe harbors provide some protection, but most practitioners advise against concurrent 506(b)/506(c) offerings for the same security.

Reg S conflicts. Reg S prohibits “directed selling efforts” in the United States. A 506(c) marketing campaign that reaches offshore audiences could be viewed as directed selling efforts for the concurrent Reg S offering. Marketing must be segmented by jurisdiction — domestic marketing for 506(c), with no spillover to offshore Reg S markets.

Enforcement Risk for Marketing Violations

SEC enforcement actions targeting marketing violations in token offerings have focused on several patterns:

Guaranteed return claims. Any marketing material that promises, guarantees, or implies specific returns on a security token investment violates antifraud provisions regardless of the offering exemption used. The SEC has brought fraud charges against token issuers who promoted specific APY, ROI, or appreciation targets in marketing materials.

Celebrity endorsements without disclosure. The SEC has settled enforcement actions against celebrities and influencers who promoted token offerings without disclosing that they received compensation. The Commission requires “clear and prominent” disclosure of the nature, source, and amount of any compensation received for promotional activities.

Misleading technology claims. Marketing materials that overstate the token’s technical capabilities, blockchain performance, or partnership status have triggered antifraud enforcement. The Terraform Labs case demonstrated that false claims about technology functionality (the fabricated Chai partnership) constitute securities fraud with dramatically increased penalties.

Compliance Checklist for Token Marketing

1. Confirm the offering is structured under 506(c) (general solicitation permitted) — not 506(b) (prohibited).
2. Have all marketing materials reviewed by securities counsel before distribution.
3. Screen all compensated promoters for bad actor disqualification.
4. File retail communications with FINRA within 10 business days of first use (if broker-dealer is involved).
5. Include risk factor references and restricted security disclosures in all materials.
6. Segment marketing by jurisdiction if concurrent Reg S offering exists.
7. Maintain records of all marketing materials, distribution dates, and audience reach.
8. Monitor community channels (Discord, Telegram) for unauthorized solicitation claims.

Enforcement Risk for Marketing Violations

The SEC has brought multiple enforcement actions targeting marketing practices in digital asset offerings:

Social media enforcement. The SEC has targeted influencer promotions of token offerings where the influencer failed to disclose compensation, violated general solicitation restrictions, or made misleading statements about investment returns. Kim Kardashian’s $1.26 million settlement in 2022 for promoting EthereumMax without disclosing she received $250,000 for the promotion demonstrates the SEC’s willingness to pursue high-profile marketing violations.

Investment return claims. Any communication suggesting specific investment returns from a security token — whether in marketing materials, social media posts, or community channels — violates both FINRA advertising rules and SEC antifraud provisions. The Howey test analysis of “reasonable expectation of profits” is directly informed by the issuer’s marketing communications.

Pre-filing offers. For Reg A+ offerings, “testing the waters” communications are permitted before filing an offering circular, but these communications must not solicit binding commitments. For Reg D 506(b) offerings, any general solicitation before the offering destroys the exemption.

General Solicitation and Token Community Building

A unique challenge for security token issuers is the relationship between general solicitation and community building. Blockchain projects typically build communities through Discord servers, Telegram groups, Twitter/X engagement, and content marketing. When a project conducts a Reg D 506(c) offering, community building activities may constitute general solicitation if they reference the offering or encourage investment.

Pre-offering community building. Community building activities that occur before the offering commences and that do not reference the offering generally do not constitute general solicitation. However, if the community building is part of a “conditioning the market” strategy — building an audience with the intent of later soliciting investment — the SEC may treat the pre-offering communications as part of the offering. The line between legitimate community building and pre-offering conditioning depends on the content of the communications and the timing relative to the offering.

During-offering community management. Once a 506(c) offering is live, community channels must be carefully managed. Community managers should be trained to avoid making investment recommendations, promising returns, or sharing offering terms in public channels. All offering-related communications should direct community members to the official offering materials through the issuer’s website or platform page.

Post-offering communications. After the offering closes, the issuer’s communications about token performance, secondary market listing plans, and development milestones must comply with ongoing antifraud obligations. Statements about token performance that constitute “offers” of the security (e.g., communications designed to maintain secondary market interest) remain subject to solicitation rules.

Marketing Budget Allocation for Token Offerings

Based on analysis of successful security token offerings, typical marketing budget allocation for a Reg D 506(c) offering ranges from $25,000 to $200,000:

The cost per qualified investor acquisition varies significantly by asset class: tokenized real estate offerings typically achieve $500-$2,000 per investor, while tokenized fund offerings targeting institutional investors may spend $5,000-$15,000 per investor due to the smaller addressable market and longer sales cycle.

Regulatory Developments Affecting Token Marketing

The SEC’s April 10, 2025 staff guidance on crypto asset securities offerings emphasized that marketing materials for token offerings must disclose smart contract functionality and risks — adding a new dimension to the content review process. The Crypto Task Force’s March 2026 meme coin guidance clarified that tokens purchased primarily for entertainment purposes may not constitute securities, creating a boundary that issuers marketing security tokens must respect to avoid classification ambiguity in their solicitation materials.

For ATS platform marketing obligations and Form ATS-N disclosure requirements, see our market structure guides. For broker-dealer marketing compliance requirements, see our guide. For enforcement actions related to marketing violations, see our tracker. For the SEC’s official general solicitation guidance, see SEC General Solicitation Compliance Guide.