what is rule 144 
rule 144 is a regulation enforced by the u s securities and exchange commission sec that sets the conditions for the sale or resale of restricted unregistered and control securities rule 144 provides an exemption from registration requirements for the sale of securities through the public markets if a number of specific conditions are met the regulation applies to all types of sellers in addition to issuers of securities underwriters and dealers the rule is designed to thwart insider trading and insure that the buyers of such securities receive adequate information the world of cryptocurrency is currently lightly regulated a bitcoin is not currently classified as a security that could change the sec is leading the push to bring cryptocurrency trading within its regulatory authority understanding rule 144rule 144 regulates transactions dealing with restricted unregistered and control securities control securities are held by insiders or others with significant influence on the issuer these types of securities are typically acquired over the counter otc or through private sales in some cases they constitute a controlling stake in an issuing company restricted securities can also be acquired through private placements or through stock benefit plans offered to a company s employees the sec prohibits the resale of restricted unregistered and control securities unless they are registered with the sec prior to their sale or they are exempt from the registration requirements the exemption requires that five specific conditions be met 1if the seller of a covered security is not associated with the company that issued the shares and has owned the securities for more than one year the five conditions of the rule are waived and the security can be sold without restrictions non affiliated parties may sell covered securities if they were held for more than six months rather than a full year provided the current public information requirements are met 5 conditions for resale of rule 144 securitiesfive conditions must be met for restricted unregistered and control securities to be sold or resold 1the holding period requirement under sec rule 144 depends on the type of issuer generally the minimum holding period is one year for reporting companies the holding period can be as little as six months while for non reporting companies it can be up to two years 1rule 144 and crypto securitiessec rule 144 applies to unregistered securities based on cryptocurrencies or blockchain based tokens while tokens like bitcoin are not currently classified as securities and would not be subject to rule 144 financial products that offer interest yield or dividends based on lending or staking such crypto tokens may fall under the definition of securities the sec is reportedly investigating several crypto exchanges including kraken gemini and genesis following the spectacular collapse of ftx in particular the sec is looking into whether these and other exchanges broke the rules by illegally offering unregistered securities to u s customers if a security is determined to be a restricted security as defined by sec rule 144 it can only be resold under specific circumstances including the passage of time the filing of form 144 and compliance with the quantity limitations imposed by the rule crypto exchanges genesis and gemini were sued by the sec in january of 2023 for the unregistered offer and sale of securities to customers through an interest bearing product this highlights the increased scrutiny that the crypto industry is facing from regulators such as the sec which has been taking enforcement action against crypto companies that violate rules and has called for them to get into compliance with existing regulations 