Asset Tokenization

What is Asset Tokenization?

Asset tokenization is the process of converting legal and economic claims against the underlying asset into composable smart contracts. In every jurisdiction in the world, asset tokenization is already being done at some scale. In the U.S., tokenization falls under the Uniform Commercial Code articles 9 through 12 - these speak to any asset issuer's ability to record stakeholders using any medium, from paper, to databases, and even blockchains.

What Regulatory Restrictions Exist?

In the U.S., the SEC makes a clear distinction between tokenization and fundraising. While tokenization converts economic and legal rights into useful tokens, fundraising lets issuers of tokenized securities raise money.

Offerings of securities that are made available to sophisticated (e.g. accredited, qualified, professional) investors are typically exempt from SEC registration and require that the issuer files Form D with the SEC after fundraising is done.

Every other offering falls under more regulatory requirements, and any issuer that raises from retail (e.g. public, non-accredited) must comply with disclosing significantly more information using various forms provided by the SEC.

On Plume, asset issuers that need help from FINRA-registered brokers, exchanges, and law firms will be able to utilize their services form one app. We provide this table strictly for reference and education.

Reg DReg A+Reg CF

Who can invest?

506(b): Maximum of 35 non-accredited investors 506(c): Only accredited investors

Public (retail investors)

Public (retail investors)

How much can be raised in a 12-month period?


Tier I: $20m Tier II: $75m


What SEC Form must be filed?

Form D

Tier 1: Form 1-A, Form 1-Z Tier 2: Form 1-A, Form 1-SA (annual), Form 1-K (semi-annual), Form 1-U (ongoing)

Form C, Form C-AR (annual), Form C-U (halfway through raise)

Is public solicitation allowed?

506(b): No 506(c): Yes



Are there resale restrictions?

506(b) mandatory 6 months lockup (for reporting companies) or 1 year to sell to the public under Rule 144 506(c): mandatory 3 months lockup, can sell to accredited

No restrictions under Tier 2

Must be held for 1 year

Is a broker-dealer required?


No, but often useful for compliance

Yes, must use licensed broker-dealer or funding portal as intermediary

Is a transfer agent required?


Tier I: no but recommended Tier II: yes, must be an SEC-licensed TA

No but recommended to manage the cap table

Is escrow required?




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