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The United States Securities and Exchange Commission (SEC) has changed some exemption rules, making it easier for crypto companies to raise funds. The changes to the rules increase the fundraising limits for offers in the Crowdfunding regulation, regulation A and rule 504 of regulation D.
The SEC’s new rules allow crypto companies to raise more money
The SEC announced Monday that it has changed some rules regarding several exemptions. Among other changes, the regulator has increased “bidding limits for Regulation A, regulatory crowdfunding and 504 Rule offers” and revised “some individual investment limits,” the announcement said. The changes will take effect 60 days after posting in the Federal Register.
“We are increasing the maximum bid amounts allowed for some exemptions,” explained SEC Commissioner Hester Peirce, also known as Crypto Mom. “By increasing the bid limit under Regulation A Level 2 from $ 50 million to $ 75 million. and the regulatory crowdfunding offer limit of $ 1.07 million to $ 5 million, we seek to reduce costs related to the amount raised under these exemptions. “
Regulation A is an exemption from the registration of the public offer; has two levels of offer. Tier 1 is for offers up to $ 20 million over a 12-month period. Currently, Tier 2 is for offers up to $ 50 million over a 12-month period. Regulation Crowdfunding allows eligible companies to offer and sell securities through crowdfunding.
Regarding the third exemption, Commissioner Peirce described: “By increasing the bid limit of the 504 rule from $ 5 million to $ 10 million, we seek to encourage more broadcasters to use this underused exemption, conduct regional multi-state bids and make use of of state-coordinated audit programs. “
Currently, Rule 504 of Regulation D provides eligible companies with an exemption from registration when they offer and sell up to $ 5 million of their securities over a 12-month period. Peirce noted:
We are making targeted improvements to a regulatory framework that unnecessarily hinders capital formation and unduly limits investors’ opportunities to participate in economic growth.
What do you think of the new SEC rules? Let us know in the comments section below.
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