Private placement

A private placement is a sale of securities to a limited, qualified group of investors rather than to the general public. Because it is not a public offering, it does not require SEC registration - it relies on an exemption instead. This is the structure behind the large majority of US tokenized real-world-asset raises.

In practice, "private placement" almost always means an offering under Regulation D, usually Rule 506(b) or Rule 506(c). The investors are typically accredited investors, and the securities they receive are "restricted" - they carry resale limits and cannot trade freely on an open market.

A private placement is documented, not undocumented. The standard package includes:

• a private placement memorandum disclosing the business, terms, and risks,
• a subscription agreement in which the investor commits and makes representations, and
• an investor questionnaire establishing accredited or sophisticated status.

For a tokenized deal, the private placement is the legal offering; the token is simply the on-chain record of the restricted security the investor bought. The appeal is speed and lower cost versus a registered public offering - the trade-off is a smaller, pre-qualified investor pool and limited secondary liquidity. Whether a given raise qualifies as a valid private placement is fact-dependent.

Source: U.S. SEC (sec.gov), as of 2026.