The Securities and Exchange Commission (SEC) has temporarily changed its crowdfunding regulations. Facilitating fundraising for startups and blockchain companies try to start on platforms like Indiegogo.
The adjustments mean that companies want to raise money through crowdfunding You don’t need documents that can be difficult to obtain as a result of the coronavirus quarantine, including annual accounts.
However, companies must submit all the necessary documents before they can get investors.
Timing guidelines were recommended by the SEC’s Small Business Capital Formation Advisory Committee.
The discharge measure was approved on May 4 with a four-to-zero SEC vote and is valid until August 31.
SEC changes crowdfunding rules amid COVID-19
Instead of waiting for a public offer for at least 21 daysAspirants can start selling as soon as they receive promises from investors.
The new rules also allow companies to collect $ 107,000 to $ 250,000 within 12 months and they can proceed with documents certified by the company’s CEO and not an accountant.
“In today’s environment there are many established startups or small businesses Have difficulty accessing capital You urgently need timely and inexpensive. ” SEC President Jay Clayton said.
SEC regulations are often poorly accepted
The community and entrepreneurs adopted the guidelines slowly the crowdfunding regulation since its introduction in 2015.
This one lack of compliance prompted the SEC to propose an increase in the annual funding limit $ 1 to $ 5 millionalong with the increase in the limit that an individual investor can contribute to 10% of their annual income or net assets.
On May 26, Ngrave, the famous hardware cryptocurrency maker, will launch its new “Zero” wallet in Indiegogo. Co-founder and CEO of Ngrave, Ruben Merrehe mentioned too Cointelegraph who decided to start the crowdfunding campaign via Indiegogo because of the “huge user base” and significant traffic that the platform has. “
On April 24, HASHwallet, in collaboration with Indiegogo, launched a crowdfunding campaign to launch its cryptocurrency.
Cyber criminals are not so happy
Companies that try to use these rules must “offer clear and prominent disclosure to investors about their trust and reputation. “
Companies younger than six months cannot work after temporary changesnor the companies that previously had the Securities Act of 1933 and the guidelines of the Crowdfunding regulation.
Also Non-US issuers are excluded, Investment companies y Blank check company.