The SEC New Rules Allow Crypto Companies to Raise More Money
Articles by: Richey May, Nov 24, 2020
The U.S Securities and Exchange commission announced in early November that it has amended several exemption rules, easing the process of raising funds for crypto companies. The new rules increases fundraising limits for Regulation Crowdfunding, Regulation A, and Regulation D’s Rule 504 offerings.
- Under the two tiers of Regulation A, the offering limit under Tier 2 of Regulation A is raised from $50 million to $75 million.
- The Regulation Crowdfunding offering limit is raised from $1.07 million to $5 million
- Rule 504’s offering limit is raised from $5 million to $10 million
Regulation A’s Tier 2 changes will seek to reduce the costs relative to the amount raised under the new exemptions. The offering for Regulation Crowdfunding allows eligible funds to offer and sell securities through crowdfunding. Under Rule 504, this exemption will seek to encourage issuers to conduct regional multistate offerings.
As stated by Commissioner Hester Peirce, “We are adopting targeted improvements to a regulatory scheme that unnecessarily hinders capital formation and unduly restricts investors’ opportunities to participate in economic growth.” The amendments will be effective 60 days after publication in the Federal Register.