In connection with the crisis, the us securities and exchange Commission (SEC) temporarily “relaxed” the requirements for cryptocurrency projects that attract capital through crowdfunding.
The temporary changes were recommended by the SEC’s Advisory Committee on small business capital formation. SEC Chairman Jay Clayton supported this initiative, saying that against the background of the current economic crisis, many small businesses are experiencing difficulties in obtaining capital in a timely and efficient manner.
These regulatory changes mean that to raise funds through crowdfunding, firms will not have to provide financial reports and documents that may be difficult to process due to quarantine. However, before securing obligations from investors, firms must provide the appropriate documentation, certified by the head of the firm.
Now token issuers do not have to wait for permission to publish their offer for at least 21 days – they can start selling immediately after signing a contract with investors. Under the new rules, firms will be able to raise between $107,000 and $250,000 over 12 months. The proposed easing was adopted on may 4, and will remain in effect until August 31.
However, the updated rules will not apply to firms registered less than six months ago, as well as firms that previously did not comply with the US securities Act of 1933 and crowdfunding rules. Non-us token issuers, investment companies, and fictitious firms are also excluded from the program.
Recall that in March, the SEC proposed to raise the limits for attracting investment in the offer of tokens-shares (STO) from $50 million to $75 million, and the income from crowdfunding – from $1 million to $5 million for 12 months.