Often on this site, we reference SEC compliance, qualification, or approval.
The SEC (Security Exchange Commission) determines what qualifies as a security and what does not. Traditionally, companies issuing ICOs have not sought out SEC qualification because, without SEC oversight and regulations, issuers of ICOs are not required to protect the interests of their would-be investors. This is the reason most ICO contracts (SAFTs) reference “buyers” instead of “investors.”
When the SEC says they “qualify and offering” or “approve an offering,” it means the SEC has permitted the company to offer for sale the securities described in the offering circular to investors.
The SEC is not judging the merits, accuracy, or completeness of the offering or information in the offering circular. Rather, the SEC is merely ensuring that the company issuing the offering has met the federal legal disclosure and the regulatory requirements necessary to make the shares available.