Rule 506(c) of Regulation D lets you raise an unlimited amount from accredited investors, and - unlike most private placements - advertise the offering publicly. The catch is verification: in exchange for being allowed to use general solicitation, you must take reasonable steps to confirm every investor is actually accredited. For tokenized raises aimed at wealthy individuals and institutions, 506(c) is the most popular exemption, because it combines open marketing with no cap on the raise.

What 506(c) allows

The two headline benefits are reach and size. You can market the offering openly - a website, social media, public events - which private placements normally forbid. And there is no limit on how much you raise or how many accredited investors participate.

That makes 506(c) powerful for a tokenized deal: you can promote it to the world, as long as only verified accredited investors actually buy.

The verification requirement

The trade-off for public marketing is strict accreditation verification. You cannot let investors simply check a box; you must take reasonable steps to confirm accreditation - reviewing tax returns, bank or brokerage statements, or a letter from their CPA or attorney.

Many issuers use a third-party verification service to handle this and keep records. Getting verification wrong can cost you the exemption, so it is not a step to shortcut.

Who can invest

Only accredited investors - broadly, individuals over the income or net-worth thresholds, plus qualifying entities and institutions. No non-accredited investors are allowed in a 506(c) offering, which is the main constraint.

This shapes your audience: 506(c) suits raises targeting wealthier individuals and institutions, not the general public. To reach non-accredited investors, you need a different exemption like Reg A+ or Reg CF.

What you still must do

506(c) is lighter than registration, but obligations remain. You file a Form D notice with the SEC shortly after your first sale, enforce resale restrictions (these are restricted securities with a holding period), and meet anti-fraud duties - your public marketing must be accurate and not misleading.

The freedom to advertise raises the stakes on honesty: more eyes means more scrutiny of your claims.

When to choose 506(c)

Pick 506(c) when you want to market publicly and your investors will be accredited. If you would rather not verify accreditation and will raise quietly from known investors, 506(b) may fit better - the next guide compares them. And remember the buy-side view: your investors are weighing the same accreditation rules, covered in accredited investors on the buy side.

Where to go next

• Next: Reg D 506(b) vs 506(c) for tokenized offerings.
• The investor's view: accredited investors on the buy side.
• Glossary: general solicitation.

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