Yesterday, the Corp Fin Staff issued new Securities Act Rules CFI 260.40 extending the application of the March 2025 Latham no-action letter to Rule 506(c) offerings of tokenized securities that use digital attestations to verify accredited investor status. Here’s the full text of the CFI:

Question: An issuer intends to conduct a Rule 506(c) offering of a tokenized security using the reasonable steps to verify accredited investor status described in the Division’s letter to Latham & Watkins LLP (March 12, 2025). The issuer intends for investors to provide representations to the issuer regarding their accredited investor status and the financing of their minimum investment amount programmatically through the tokenized security via a digital attestation. Does the staff view this as a satisfactory method of providing representations to the issuer for purposes of the position taken in the Latham & Watkins letter?

Answer: Yes. The staff notes that it will be important for the issuer to ensure that it retains sufficient records of the process used via the token standard protocol to verify accredited investor status. See Securities Act Release No. 9415 (July 10, 2013) (noting that “it will be important for issuers and their verification service providers to retain adequate records regarding the steps taken to verify that a purchaser was an accredited investor”).

Issuers are also reminded that whether an issuer has taken reasonable steps to verify that a purchaser is an accredited investor is an objective determination by the issuer (or those acting on its behalf), in the context of the particular facts and circumstances. See Securities Act Release No. 9415 (July 10, 2013); and Securities Act Rules CFIs 256.35 and 256.36. [July 21, 2026]

– Meredith Ervine