When issuing token securities through a private placement, is there no problem as long as I receive investment from no more than 49 people?

To state the conclusion first, a private placement of token securities is judged not by the standard of 'the actual number of investors, 49,' but by 'the number of persons who received a solicitation to subscribe,' so limiting the number of persons alone is not safe.

Token securities may be assessed as securities under the Financial Investment Services and Capital Markets Act, and in that case, if an investment solicitation is made to 50 or more persons, it is regarded as a public offering and regulation applies.

The important point here is not whether investment actually occurred, but 'the act of solicitation itself.'

All persons to whom a proposal was delivered or an investment explanation was given are included, and whether a contract was concluded is not the criterion for the determination.

For example, even if you gave a token securities investment explanation to 80 people and only 30 of them invested, it may already meet the requirements for a public offering.

In particular, in the token securities structure, because promotion through online channels is frequent, problems easily arise.

Public postings on a website, notices on social media, announcements on Telegram, and the distribution of investment explanation materials can all be interpreted as acts of solicitation, so the number of targeted persons may expand unintentionally.

In this case, even if it was designed as a private placement, there is a risk of becoming subject to public-offering regulation under the Financial Investment Services and Capital Markets Act.

In such a case, it may be assessed as having conducted a public offering without submitting a securities registration statement, and there is also a possibility of becoming subject to sanctions for selling unlicensed financial investment products.

In practice, to prevent this, operations are conducted by specifying the persons to be solicited in advance, restricting the channels for investment proposals, and separately managing the solicitation history.

In addition, it is common to exclude, as far as possible, public promotion aimed at an unspecified large number of people, and in order to maintain the private-placement requirements, additional conditions, such as restrictions on resale between investors, must also be reviewed.

Therefore, it is accurate to understand that a private placement of token securities is not a matter of limiting the number of investors, but that the key lies in how the method and scope of investment solicitation are controlled.

For matters where whether financial regulation applies is important, such as token securities, checking the structure in advance and reviewing the relevant statutes helps to prevent unnecessary legal risks.