Rule 104 — Regulation A’s disqualification, imported

Rule 104(a) cross-reads Rule 262. The covered-person list is the Regulation A list: issuer, predecessors, affiliated issuers, directors, executive officers, other officers participating in the offering, general partners, managing members, 20% voting-equity beneficial owners, promoters, paid solicitors and their GPs/directors/officers. Instruction: read every “Regulation A” in 262(a) as “Regulation Crypto Assets.”

The lookback does not reach events before the final rule’s effective date. Those events must still be described in writing to each purchaser a reasonable time before sale (or in the offering circular). Failure to disclose a pre-effective event does not destroy the exemption if the issuer did not know and, exercising reasonable care, could not have known. Reasonable care requires a factual inquiry; the nature of the inquiry varies with the facts. That is Rule 506(e) transplanted.

The alternatives section (pp. 268–269) floats two other designs: apply disqualification to pre-existing events, or narrow the lookback (e.g., misdemeanor lookback limited to the penalty period). The Commission kept 262 for consistency — issuers already running a 262/506(d) questionnaire can reuse it — and used disclosure rather than disqualification for the pre-effective stock of crypto-industry settlements.

• Rule 262 (Reg A), Rule 506(d) (Reg D), Rule 503 (Reg CF) — the three existing bad-actor codes. 104 picked 262, not 506(d). Differences are small but real (covered-person list, timing).
• Disqualification of Felons and Other “Bad Actors” from Rule 506 Offerings, Release 33-9414 (July 10, 2013) — the policy origin.
• Proposed 17 CFR 200.30-1(n)(1) would delegate to the Director of Corporation Finance the authority to grant Rule 104 waivers for good cause.

• Propose adding persons with administrative keys, or persons who hold more than 20% of the subject crypto asset, to the covered-person list. Otherwise 104 is an equity-company rule taped onto a token issuer.
• If you have a pre-2025 ICO settlement, the lookback holiday is why you can use this exemption at all. File a comment supporting the 506(e)-style treatment and attach the form of disclosure you would use.
• Waivers: ask Corp Fin to publish a 104 waiver matrix (same as the 506(d) waiver letters) so the first ten applications are not a lottery.