When can a tokenized security be resold in the United States?

A tokenized security can be resold in the United States when the exemption it was sold under allows it: from the day of purchase under Regulation A, after six months or one year under Regulation D depending on whether the issuer files reports with the Securities and Exchange Commission, after one year under Regulation Crowdfunding, and only once the distribution compliance period has ended for a Regulation S offering. The token changes none of these dates: the calendar comes from the offering route, and the token's transfer rules are there to enforce it.

This article covers the federal rules that apply in the United States, with amounts in US dollars. It is general information, not legal or tax advice, and state securities laws add their own conditions.

The reader in mind is an investor who bought a token in a private offering and wants to know when a sale becomes possible, and the issuer who has to explain the answer to several hundred holders without getting a date wrong. Both need the same three things: the route the security was sold under, the date the clock started, and the conditions that still apply once the clock has run. The periods below were read in the Code of Federal Regulations and on the Securities and Exchange Commission's own pages; where a rule turns on facts that only the issuer's counsel can settle, the text says so.

Does putting a security on a blockchain change the resale rules?

No: a security recorded on a blockchain is subject to the same federal securities laws as the same security recorded on paper or in a transfer agent's database. The staff of three divisions of the Securities and Exchange Commission said so in a January 2026 statement on tokenized securities, which describes a tokenized security as a financial instrument that meets the legal definition of a security and is formatted as, or represented by, a crypto asset, with ownership recorded in whole or in part on a crypto network. The statement's central point is that the format does not affect how the securities laws apply.

That has a direct consequence for resale. Under the Securities Act, every offer and sale of a security must be registered or fit an exemption, and that is true of the investor's resale just as it is of the issuer's first sale. A token that moves in seconds between two wallets is still a sale of a security, and the seller needs an exemption for it.

The same staff statement separates two families of tokens, and the difference matters to a holder. In an issuer-sponsored token, the issuer or its agent tokenizes its own security, and the record of holders may be kept on the network itself, so that a transfer of the token is a transfer of the security. In a third-party token, someone unaffiliated with the issuer either holds the underlying security in custody and issues a token that evidences an interest in it, or issues a security of its own that gives synthetic exposure to the underlying one. A holder of the second kind owns a different instrument, with its own issuer and its own resale analysis. The rest of this article deals with the first kind: a token that is the issuer's own share, unit or note.

Which offering route was the token sold under, and what does each mean for resale?

The resale calendar of a tokenized security is set by the exemption the issuer used to sell it: Regulation D and Regulation S produce securities with resale restrictions, Regulation A does not, and Regulation Crowdfunding imposes a one-year limit with exceptions. The route is stated in the subscription agreement and the offering document, and it is the first thing to look up, because nothing in the token itself tells a wallet which regime applies.

The table compares the routes on the same four criteria, as the Securities and Exchange Commission's overview of capital-raising exemptions and the underlying rules describe them.

Two things in this table are often misread. The first is that Rule 506(b) and Rule 506(c) differ in how the offering may be marketed and who may buy, and not at all in resale: both produce restricted securities with the same holding period. The second is that "not restricted" under Regulation A is a statement about federal law only. A resale still has to work under state law and has to find a place where it can lawfully happen, which the later sections cover.

How long must you hold a token bought under Regulation D?

A token bought under Rule 506(b) or Rule 506(c) is a restricted security, and under Rule 144 a holder who is not an affiliate of the issuer must hold it at least six months if the issuer is a reporting company and at least one year if it is not. Those are the two periods written in Rule 144 in the Code of Federal Regulations, and the Securities and Exchange Commission's investor publication on Rule 144 gives the same two figures.

Three details decide which period applies and when it starts.

• What "reporting" means. The six-month period applies only if the issuer is subject to the reporting requirements of the Securities Exchange Act and has been for at least 90 days immediately before the sale. A private company that raised money under Regulation D and files only a Form D notice is not a reporting company. Most issuers of tokenized private securities fall on the one-year side.
• When the clock starts. Rule 144 counts from the later of the date the security was acquired from the issuer or from an affiliate of the issuer. For a purchase, the rule says the holding period does not begin until the full purchase price is paid. A subscription signed in March and funded in April starts in April.
• What is being relied on. Rule 144 is a safe harbor: a holder who meets its conditions is treated as not being an underwriter and can sell under the ordinary trading exemption. The Commission's publication says the rule is not the exclusive means of selling restricted securities, which is why the private-resale routes described further down exist.

The conditions that remain once the holding period has run depend on who is selling and what kind of issuer it is.

An affiliate is a person who controls the issuer or is under common control with it: typically an executive officer, a director or a large holder. The rule also requires that a non-affiliate seller has not been an affiliate during the three months before the sale. A founder's tokens and an outside investor's tokens can therefore sit in the same smart contract and follow different rules, which is one reason an issuer keeps an affiliate list alongside its holder register.

One exclusion deserves a question to the issuer: Rule 144 is not available for securities first issued by a shell company, meaning an issuer with no or nominal operations and no or nominal assets beyond cash, or by an issuer that once was one, unless the conditions written into the rule for former shell companies are met. A special-purpose entity created to hold one asset is not automatically a shell in that sense, but the analysis belongs to the issuer's counsel, and a holder is entitled to ask for its conclusion.

When can a token sold offshore under Regulation S come into the United States?

A token sold offshore under Regulation S cannot be offered or sold to a US person until the distribution compliance period has ended, and that period is 40 days for debt securities in Categories 2 and 3 and six months or one year for equity securities in Category 3. Regulation S, in the Code of Federal Regulations, sorts offerings into three categories, and the period depends on the category.

• Category 1 carries no distribution compliance period. It covers, among others, securities of a foreign issuer that reasonably believes there is no substantial US market interest in them, and offerings directed into a single country other than the United States.
• Category 2 covers equity securities of a reporting foreign issuer, and debt securities of a reporting issuer or of a non-reporting foreign issuer. Its period is 40 days.
• Category 3 covers everything else, which includes the equity of a US company and of a non-reporting foreign company. Debt in this category has a 40-day period. Equity has a one-year period, shortened to six months if the issuer is a reporting company.

The start of the period is not the investor's own purchase date. Regulation S defines the distribution compliance period as beginning on the later of the date the securities were first offered to persons other than distributors and the date of closing of the offering. An investor who subscribes on the first day of an offering that stays open for three months waits three months longer than the bare number suggests.

For Category 3 equity, the regulation also dictates what happens on the register during the period. The purchaser certifies that it is not a US person, agrees to resell only under Regulation S, under a registration or under an available exemption, and agrees not to hedge except in compliance with the Securities Act. Securities of a US issuer carry a legend to that effect. The issuer must refuse to register any transfer that does not comply. In a tokenized offering, that last duty is what the transfer restriction in the smart contract performs.

During the period, a holder is not locked in completely: Regulation S also provides for offshore resales to non-US buyers, under its own conditions. The restriction is on the security flowing into the United States, not on every change of owner.

Are Regulation A and Regulation Crowdfunding tokens freely tradable?

Securities sold under Regulation A are not restricted securities under federal law, while securities sold under Regulation Crowdfunding cannot be transferred for one year after they are issued except in four cases. The Securities and Exchange Commission's overview of exemptions lists "No" under restrictions on resale for both tiers of Regulation A and "12-month resale limitations" for Regulation Crowdfunding.

Regulation A works as a small public offering. The issuer files an offering statement on Form 1-A that the Commission must qualify; Tier 1 allows up to $20 million in a 12-month period and Tier 2 up to $75 million, with audited financial statements and ongoing reports in Tier 2. Because the offering is public in character, the buyer receives a security that federal law does not restrict. The difference between the tiers shows up in state law: the Commission's overview states that Tier 2 offerings are not required to be registered or qualified with state securities regulators, while Tier 1 offerings are.

Regulation Crowdfunding, written in Part 227 of Title 17 of the Code of Federal Regulations, limits transfers for one year beginning when the securities were issued. During that year, the regulation allows a transfer in these four cases:

• to the issuer of the securities;
• to an accredited investor, or to a person the seller reasonably believes is one;
• as part of an offering registered with the Commission;
• to a member of the purchaser's family or the equivalent, to a trust controlled by the purchaser or created for the benefit of a family member, or in connection with the purchaser's death, divorce or a similar circumstance.

The regulation defines family broadly: children, stepchildren, grandchildren, parents, stepparents, grandparents, spouses or spousal equivalents, siblings and in-laws, including adoptive relationships. After the year, the Commission's small-business guidance on private secondary markets lists Regulation Crowdfunding securities among those that are no longer restricted.

For both regimes, "free under federal law" is a starting point. The issuer's own documents may add contractual limits, such as a right of first refusal or a minimum transfer size, and the token can only move to a wallet the issuer's process has cleared.

What dates does one investor get under each route?

For a purchase paid in full on 16 March of year 1, the first date a general resale is possible under federal law runs from the same day under Regulation A to 16 March of year 2 under Regulation Crowdfunding or under Regulation D with a non-reporting issuer. This is a worked example with two assumptions: the investor is not an affiliate of the issuer, and, for the Regulation S rows, the offering was first offered before the purchase and closed on 30 April of year 1, 45 days after the investor paid.

The chart shows three things a list of periods hides. The longest wait in the example belongs to the offshore equity buyer, because the Regulation S period counts from the closing of the offering and not from the investor's payment: one year becomes 410 days. The Regulation D buyer's result swings by 181 days on a single fact about the issuer, whether it has been a reporting company for at least 90 days before the sale. And the Regulation Crowdfunding date is the only one in the chart with a door open before it, since a sale to an accredited investor or back to the issuer is allowed at any point in the year.

Each date also has a condition attached. On 16 September of year 1, the Regulation D holder of a reporting issuer's token can sell only if the issuer is current in its reports; that condition falls away on 16 March of year 2. On 30 April of year 2, the offshore holder of a US issuer's equity token still needs Rule 144 or another exemption for a sale to a US buyer. And the exact day count, including whether the sale can take place on the anniversary itself or the day after, is a point the issuer's counsel fixes when it programs the lock, usually with a margin.

Can you sell before the holding period ends?

Yes, in a private transaction: a holder of restricted securities can sell before the Rule 144 holding period ends to a qualified institutional buyer under Rule 144A, or to an accredited investor under the private-resale exemption in Section 4(a)(7) of the Securities Act. Neither route makes the token freely tradable; each moves it to a new holder who takes it with the restrictions still attached.

Rule 144A, in the Code of Federal Regulations, covers resales made only to a qualified institutional buyer, or to a buyer the seller reasonably believes is one. The rule defines that buyer as an institution that owns and invests on a discretionary basis at least $100 million in securities of unaffiliated issuers, with a threshold of $10 million for a registered dealer. The seller must take reasonable steps to make the buyer aware that the sale may rely on the rule, the securities must not be of the same class as securities listed on a national securities exchange when issued, and, where the issuer is not a reporting company, the holder and the prospective buyer must have the right to obtain basic business and financial information from the issuer on request.

Section 4(a)(7) is a statutory exemption for certain private resales to accredited investors. The Securities and Exchange Commission's guidance on private secondary markets describes it as carrying several conditions, including limits on the types of purchasers, on how the securities are sold and on the information that must be given to prospective purchasers. The same guidance lists securities acquired in a Section 4(a)(7) resale, and in a Rule 144A resale, as restricted securities: the buyer starts from the same position the seller was in.

For an individual holder, the practical route before the calendar date is therefore a sale to another accredited investor, arranged with the issuer or through a broker-dealer that documents the exemption. For a Regulation Crowdfunding token, the regulation's own exception for transfers to accredited investors does the same job. In every case the issuer or its transfer agent has to accept the transfer, so the first call is to them.

Where can a tokenized security actually be resold?

A tokenized security is resold in one of two places: a direct transfer between two holders that the issuer or its transfer agent approves, or an alternative trading system operated by a registered broker-dealer. A lawful date on the calendar does not create a buyer or a venue, and the holder needs both.

An issuer-approved transfer is the simplest form. The seller finds a buyer, the buyer goes through the issuer's onboarding (identity checks, and accreditation status where the exemption requires it), the issuer or its agent confirms that the transfer fits an exemption, and the buyer's wallet is added to the list of addresses allowed to hold the token. Only then will the token move. Price and payment are agreed between the two parties.

An alternative trading system is, in the definition given by the Securities and Exchange Commission's investor education site, an SEC-regulated electronic trading system that matches orders for buyers and sellers of securities; it is not a national securities exchange. Regulation ATS, in the Code of Federal Regulations, requires such a system to register as a broker-dealer and to file a notice on Form ATS at least 20 days before it starts operating. For a holder, the consequence is practical: selling on such a system means opening an account with the broker-dealer, passing its checks, and trading only the securities it has admitted. An issuer that says its token "can trade" should be able to name the system and say whether the token has been admitted to it.

What a tokenized security cannot lawfully do is trade the way an unrestricted crypto asset does, on any venue and between any two wallets. That is by design, and the sequence below shows where the rules bite.

Why do the token's transfer rules enforce the calendar?

The token's transfer rules enforce the calendar because the securities rules place the duty on the issuer: Regulation D makes the issuer take reasonable care that buyers are not acquiring for redistribution, and Regulation S requires the issuer of Category 3 equity to refuse to register a transfer that does not comply. On paper, those duties are met with a legend printed on the certificate and a transfer agent who declines to process a transfer. Onchain, they are met with code.

The paper process is worth knowing, because the tokenized one copies it. The Securities and Exchange Commission's publication on Rule 144 explains that a restricted certificate carries a restrictive legend, that only a transfer agent can remove it, and that the transfer agent will generally not do so without the issuer's consent, usually in the form of an opinion letter from the issuer's counsel. The same publication notes that disputes over legend removal are a matter of state law, not federal law.

A permissioned security token translates each element:

• The legend becomes a lock. The contract refuses any transfer of a given holder's tokens before a stored date, or before the issuer's agent releases them.
• The transfer agent's refusal becomes an allowlist. The contract moves the token only to addresses that have been approved, so a buyer who has not been cleared cannot receive it.
• The category of holder becomes a flag. An offshore holder's tokens can be blocked from US addresses during the distribution compliance period, and an affiliate's tokens can be held to different rules from an outside investor's.
• The opinion letter stays a letter. The decision that a restriction can be lifted is still a legal judgment made offchain; the contract only executes it.

This is where tokenization helps and where it does not. It makes the restriction hard to breach by mistake, and it gives the issuer one register that is always current. It does not shorten any period, and it does not make the legal judgment automatic: a lock set to the wrong date releases on the wrong date. A holder whose transfer is refused before the date is usually looking at the rule working as intended.

Do state blue sky laws still apply to a resale?

Yes: a resale that fits a federal exemption may still need to be registered or exempt under the securities law of a state, known as blue sky law. The Securities and Exchange Commission's guidance on private secondary markets says that a resale relying on the main federal resale exemptions still needs to be registered or to meet an exemption under state securities laws unless the issuer is a reporting company, and that state regulators keep the power to investigate and bring enforcement actions for fraud, to require notice filings and to collect fees in every case.

Three points follow for a tokenized security.

• The preemption an issuer enjoyed at the offering does not automatically cover the resale. The Commission's overview shows that Rule 506 offerings, Tier 2 of Regulation A and Regulation Crowdfunding are exempt from state registration and qualification at the offering stage. A later sale between two investors is a separate transaction with its own state analysis.
• The answer varies from state to state. Each state has its own statute and its own exemptions for resales by holders who are not the issuer. Many are workable for an occasional private sale, but the conditions are not uniform, and the relevant state is generally the buyer's.
• The issuer or the trading system usually does this work. A broker-dealer operating a trading system decides in which states it will accept orders for a given security, which is why a token can be tradable for a buyer in one state and unavailable to a buyer in another.

A holder does not need to become an expert in fifty statutes. The useful question is narrower: in which states has the issuer, or the system the token trades on, confirmed that resales are permitted?

What should a holder ask the issuer before buying?

Before buying a tokenized security, a holder should ask the issuer which exemption the offering relies on, when the holding period starts and ends for that purchase, and where and how a resale can take place afterwards. An issuer that has prepared for secondary transfers answers these in writing, and an issuer explaining the rules to existing holders can use the same list as the outline of its notice.

• Which exemption is this offering made under? Rule 506(b), Rule 506(c), Regulation S, Regulation A Tier 1 or Tier 2, or Regulation Crowdfunding. If the offering combines two, such as a Regulation D tranche for US investors and a Regulation S tranche offshore, ask which one your tokens belong to.
• Is the issuer a reporting company, and since when? The answer decides between six months and one year under Rule 144, and whether current public information will be available when you want to sell.
• What date does my clock start, and what date is programmed into the token? For Regulation D, the date the price was paid in full; for Regulation Crowdfunding, the date of issuance; for Regulation S, the later of the first offer and the closing of the offering.
• Am I treated as an affiliate? If you will hold a large position or a board seat, the affiliate conditions of Rule 144 apply to you.
• Is the token the security itself? Ask whether the token is the issuer's own security with the holder register kept onchain, or a third party's instrument representing an interest in a security held elsewhere.
• Who approves a transfer, and how long does it take? The issuer, a transfer agent or a broker-dealer; the documents the buyer must provide; who pays for a legal opinion if one is needed.
• Is the token admitted to an alternative trading system? If so, which broker-dealer operates it, and in which states it accepts orders for this token.
• What do the issuer's own documents add? A right of first refusal, a minimum transfer size, a cap on the number of holders, a redemption right, or a lock-up longer than the legal one.
• What happens if the issuer stops reporting or stops responding? A restriction that only the issuer can lift depends on the issuer still being there to lift it.

The answers fit on one page, and they turn "when can I sell?" from a guess into a date with its conditions. For the issuer, publishing that page to every holder at the time of purchase is also the cheapest way to avoid several hundred individual explanations when the first anniversary arrives.