For federal requirements, please visit the USA Securities-Related Laws page.

Cryptocurrency exchanges must register with the New Jersey Bureau of Securities.

New Jersey Bureau of Securities (“the Bureau”) has recently issued two emergency orders to stop online cryptocurrency-related investment entities Bitcoiin and Bitstrade, from fraudulently offering unregistered securities in the state. Securities must be registered with the state to be legal. New Jersey accepts the Uniform Application to Register Securities (Form U1). Uniform Forms and the New Jersey Addendum require an original signature. The Form 1-A and exhibits must be filed with New Jersey in the form filed with the SEC (signed or conformed, as required by the SEC).

Registration requires filing or delivery of:

• Filing fee
• Application form
• Financial statements
• A Consent to Service of Process (Form U2)
• Uniform Corporate Resolution (if the issuer is a corporation)
• SEC Form 1-A with exhibits (Charter, Bylaws, Legal and Tax options, Underwriting, Dealer-Manager or other Selling Agreement, Indenture (if applicable), Specimen of Security, Written Consents of Experts)
• All advertising and sales literature
• Form NJBOS-5, New Jersey Addendum, available here
• Any other document or information request by the Bureau

New Jersey collects a fixed fee in the amount of $1000. Fees should be made payable to “New Jersey Bureau of Securities.” Payments should be sent to the following address:

Mailing Address: New Jersey Bureau of Securities, 153 Halsey Street, 6th Floor Newark, NJ 07102

Courier Address: New Jersey Bureau of Securities, 153 Halsey Street, 6th Floor Newark, NJ 07102

For additional information please contact the Bureau of Securities at (973) 504-3600. Please note the Bureau does not have a separate website or specific section of its website devoted to securities registration and exemption filings.

Regulation of online exchanges of digital assets

On March 7, 2018, the Securities and Exchange Commission (“SEC”) issued a release addressing the regulation of online trading platforms (or exchanges) on which investors have bought and sold digital assets, including coins or tokens sold in initial coin offerings (“ICOs”). Consistent with prior SEC articulated positions, the SEC stated that many of these tokens sold in an ICO meet the definition of a “security” and accordingly these trading platforms on which ICO tokens trade should register with the SEC as a national securities exchange or alternative trading system unless exempt from registration. In its release, the SEC expressed its concern that many of these trading platforms may appear to investors as SEC-regulated exchanges, but are not and do not meet the regulatory and listing standards of a registered exchange. In light of this, in its release, the SEC listed a series of questions that investors should ask before trading assets on an online trading platform. These include, but are not limited to, asking if:

1. Is the platform registered as a national securities exchange or an ATS with the SEC?;
2. Is there information in FINRA’s BrokerCheck ® about any individuals or firms operating the platform?;
3. How does the platform select digital assets for trading?;
4. What are the trading protocols?;
5. How are prices set on the platform?;
6. How does the platform safeguard users’ trading and personal identifying information?;
7. What are the platform’s protections against cybersecurity threats, such as hacking or intrusions?; and
8. Does the platform hold users’ assets? If so, how are these assets safeguarded?
   For a complete list of these questions and a copy of this SEC release see SEC Release.

Sources

• New Jersey Bureau of Securities
• New Jersey Securities Registration
• New Jersey Bureau of Securities Orders “Bitstrade” to Stop Offering Unregistered Securities in the State
• New Jersey Bureau of Securities Orders Online Cryptocurrency Promoter “Bitcoiin” to Stop Offering Unregistered Securities in the State
• SEC Release