As the cryptocurrency and digital asset landscape continues to evolve at breakneck speed, regulatory compliance remains one of the most critical challenges facing industry participants. From the explosive growth of tokenized securities to the maturation of Initial Coin Offerings (ICOs), financial institutions and technology companies are grappling with complex regulatory frameworks that span multiple jurisdictions and oversight bodies.

In this comprehensive Q&A, we sit down with George S. Georgiades, a prominent New York securities and blockchain attorney, who brings a unique perspective shaped by his early involvement in establishing new securities programs and his hands-on experience as both regulatory counsel and compliance officer at major financial institutions.

Georgiades focuses his practice on capital formation transactions and providing regulatory compliance advice for broker-dealers, investment advisors and crowdfunding portals, with particular expertise in technology-driven finance including Crowdfunding, Regulation A+, and Initial Coin Offerings. His in-house experience includes serving as Regulatory Counsel to Garrison Investment Group LP (a $4.2 billion AUM investment advisor) and Associate Counsel and Compliance Officer at Maxim Group LLC, a FINRA registered broker-dealer.

From the recent regulatory shifts under the current administration to the practical challenges of FINRA compliance for crypto broker-dealers, this discussion provides essential insights for legal practitioners, compliance professionals, and industry executives navigating the intersection of traditional finance and digital innovation. As General Counsel at Borderless.xyz, Georgiades continues to work at the cutting edge of stablecoin regulation and blockchain legislation, offering real-world perspective on how regulatory frameworks are adapting to technological advancement.

The following three-part interview addresses the most pressing regulatory questions facing the industry today: structuring compliant token offerings, managing FINRA compliance for traditional financial institutions entering the crypto space, and integrating digital assets into crowdfunding platforms. Each response reflects not only deep legal expertise but also practical experience gained from years of working directly with regulators, exchanges, and innovative financial technology companies.

Question 1: Given your early involvement in establishing new securities programs and your particular focus on Initial Coin Offerings, how do you advise crypto companies on structuring token offerings to comply with securities regulations? What are the key considerations when determining whether to proceed under Regulation D, Regulation A+, or other exemptions for digital asset offerings?

The ICO landscape has matured considerably since my first engagements over a decade ago as regulatory counsel. Recent offerings, such as Pump.fun’s milestone $500 million raise in under 12 minutes, underscore both the continued relevance of ICOs and evolving sophistication of this capital formation model. ICOs generally function as pre-sales of network tokens and their structure and sales strategy may trigger U.S. securities laws. 

The first step in planning your ICO is to review the terms, structure and jurisdictions for the proposed token sale with legal counsel to understand the applicability of US securities regulations and other laws. This analysis typically begins with review under established legal principles, particularly the Howey Test derived from SEC v. W.J. Howey Co., as well as other jurisprudence, enforcement actions and recent guidance from the Securities and Exchange Commission (SEC).

ICOs which fall within the purview of US securities regulations must register the offering with SEC or qualify under an exemption from registration. For example, exempt offerings under Regulation D (Rule 506) remain the most common pathway for pre-sales allowing sales to accredited investors. Regulation A+, referred to as a “mini-IPO”, offers broader access to retail investors but has a far more rigorous qualification process and post-offering reporting. In addition to federal regulations, issuers must also consider the applicability of state-level “blue sky” laws and international securities regulations when the offering extends to non-U.S. investors. Other critical issues that should be evaluate including corporate structuring (e.g., U.S.-based versus offshore entities), integrating anti-money laundering reviews, assessing whether intermediary licensing (such as broker-dealer or funding portal registration) is needed, and engaging appropriate transfer agent services to manage token ownership records. There are also strict rules when it comes to marketing materials as well as engaging intermediaries in the sales process, so it is imperative to work closely with your legal counsel on all aspects of the offering. 

The SEC’s recent departure from ‘regulation by enforcement’ policy under the prior administration to a focus on clarity, engagement and innovation offers ICOs a new opportunity for re-engagement. The SEC’s Crypto Task Force is currently exploring frameworks such as conditional no-action relief for certain token offerings and discussions are underway regarding a formal regulatory sandbox to facilitate compliant experimentation in tokenized securities. These tailwinds will bring about a resurgence of ICOs in the US but it is important to proceed with caution and in compliance with the various legal requirements. 

Question 2: Drawing from your experience as Associate Counsel and Compliance Officer at a FINRA registered broker-dealer, what specific compliance challenges do traditional broker-dealers face when expanding into cryptocurrency trading or custody services? How should firms structure their operations to meet FINRA requirements while serving crypto clients?

From Robinhood’s recent announcement of its tokenized securities products, Goldman Sachs-BNY announcing tokenized money market funds to Figma signaling potential tokenization of its stock following its upcoming IPO, adoption of tokenized securities rapidly growing. New national legislation for the regulation of cryptocurrencies is expect later this year which will further clear the way for greater adoption of blockchain technology.  However, traditional broker-dealers seeking to extend their services to digital asset products must navigate significant regulatory and operational hurdles.  

Member firms interested in expanding into digital assets, whether crypto currencies or tokenized securities, should begin by promptly engaging with FINRA and working collaboratively to updating its regulatory disclosures about business models, products, custodians, transaction flows, settlement processes and supervisory controls among other required disclosures (Form CMA). The reporting and approval requirements reflect FINRA’s heightened scrutiny of activities that may impact investor protection, especially when assets are not clearly defined as securities. Digital asset trading and custody raise complex questions under a number of FINRA rules including Rules 3110 (Supervision), 2210 (Communications), and 3310 (Anti-Money Laundering). For example, supervision of digital asset trades must account for offchain settlement risk, valuation volatility, and potential wallet vulnerabilities. Review of all communications must be accurate, balanced, and avoid omitting material risks, especially where digital tokens depart from more traditional equity offering structures.

Broker-dealers also face challenges under SEC Rule 15c3-3 (Customer Protection Rule). Custody of crypto assets may require novel control agreements, third-party attestations, and technological safeguards that meet SEC’s standards for "good control locations." Moreover, if the firm seeks to also facilitate secondary market trading in crypto securities, they may need to register as an Alternative Trading System (ATS) under Regulation ATS. A modular approach to structuring operations is often the preferred route.

For a successful transition into digital asset industry, broker-dealers need to meaningfully evaluate infrastructure vendors for this unique asset class and have tailor made policies and operational controls as well as comprehensive risk analysis to balance innovation with customer protections and ensure compliance with applicable regulations and avoid enforcement action, reputational risk, and systemic exposure to the firm.

Question 3: With your expertise representing leading crowdfunding portals from inception and your experience with technology-driven finance, how are crowdfunding platforms navigating the integration of digital assets and cryptocurrencies? What regulatory considerations should platforms address when facilitating crypto-based fundraising or accepting digital asset investments?

Having served as a legal counsel to several of the leading crowdfunding portals and a leading advocate of crowdfunding as a modern, transparent and effective means to raise capital since the program’s inception, crowdfunding portals can play a leading role in the growing demand for tokenized securities offerings. This requires portals to carefully navigate the nuances of tokenized offerings including specific risks posed by blockchain transactions and unique infrastructure requirements.

Operationally, crowdfunding portals are non-custodial institutions so the selection of vendors must include qualified custodians, transfer agents and financial institutions that have the appropriate infrastructure for the issuance of the tokenized securities, including anti-money laundering programs tailored to digital asset transactions as well as secure custodial solutions.  Crowdfunding Portals must also ensure robust investor protection policies, such as transparent disclosure of risks related to digital assets, including volatility, cybersecurity vulnerabilities, and liquidity constraints. This would include expanding risk disclosures and education materials as well as taking steps to ensure that these risks are understood by its users. Written Supervisory Procedures need to be amended and approved by FINRA that encompass new transaction settlement flows, approval of vendors, supervision and compliance with Regulation CF. Ultimately, successful integration hinges on proactive regulatory engagement, transparent communication, and adaptive governance frameworks that align with both investor expectations and statutory obligations.