- In a vote of 3-2 on Monday, the SEC adopted amendments to harmonize several private company securities offering exemptions, including Reg CF, Regulation A+ and Regulation D. We are delighted to be reporting on this news, and we expect the rule changes to have a significant, positive impact on our clients’ access to capital and the alternative finance industry at large.
- The JOBS Act exemptions provide pathways for all – including historically marginalized groups – to connect with main street investors, survive in the incredibly competitive startup arena, and, quite importantly, create jobs in the U.S. market. The amendments aim to address a number of problems that make the current framework difficult to maneuver.
Regulation Crowdfunding (Reg CF)
- The Reg CF offering limit is raised to $5M from $1.07M, while also amending investment limits for investors to increase opportunities for small and medium enterprises to raise capital. (Crowdfund Insider)
- Testing the waters permitted prior to filing Form C;
- Limits on advertising after Form C filed;
- Slight expansion to the definition of “Terms of the offering” under Rule 204; and
- The ability for the issuer to disclose terms of the Reg CF offering in the offering materials of a concurrent offering
- For certain Reg CF issuers, extend for 18 months the existing temporary relief providing an exemption from certain Regulation Crowdfunding financial statement review requirements
- The rules also increased Reg A+, Tier 2 raise limits to $75M, a move that may attract more startups to raise capital online. Carlos Domingo, CEO of Securitize, sat down with Crowdfund Insider to explore the enormous impact these rule changes will have on capital formation.
Regulation D, Rule 504
- The Rule 504 offering limit is raised to $10M from $5M.
Regulation D, Rule 506(b)
- Financial information that must be provided to non-accredited investors in Rule 506(b) private placements changed to align with the financial information that issuers must provide to investors in Regulation A offeringsRegulation D, Rule 506(c)
- The SEC adopted a 5-year time limit (versus 90 days) for issuers to rely on a prior accredited investor verification check
- These amendments and others will go into effect 60 days after publication in the Federal Register
Crypto and Blockchain News:
In the Spotlight:
- Our esteemed client, Leveller Media, a global entertainment studio and crowdinvesting platform, has launched its Security Token Offering (STO). The firm seeks to enable fair and open entertainment financing by connecting creators, investors, and fans. Leveller aims to disrupt the entertainment industry by freeing access to capital for creatives and making viewers active investors.
- The STO launch comes after the world premiere of the studio’s first film, The Night, directed by Iranian-American director Kourosh Ahari, and starring 2016 Cannes Film Festival Best Actor Shahab Hosseini. The Night, a psychological thriller, premiered at the 2020 Santa Barbara Film Festival on Jan 18th. It also appeared at Iran’s 38th Annual Fajr Film Festival in February.
- For more information on Leveller Media click here (Decrypt)
- As reported in an earlier issue, PayPal is surging ahead in developing cryptocurrency services. This week, the online payments giant revealed more information, pointing to early 2021 for the launch of their crypto services to all users. (Coin Telegraph)
- Michael Miebach, President of Mastercard, doubled down on the potential their blockchain patents hold, especially as central bank digital currencies are on the rise. Miebach highlighted the variety of options Mastercard’s intellectual property can offer to central banks, including links to any merchant accepting Mastercard (Coindesk)
- The US District Court for the District of Colorado entered judgements against Venture Capital Investments LLC and its principal for fraudulent solicitation and fund misappropriation stemming from a digital asset Ponzi scheme. The judgements come after 72 investors were fraudulently enticed to invest in commodity pools trading in digital assets; however, funds were then used to buy luxury items and pay other investors to maintain the scheme (Crowdfund Insider)
- Over $1B in Bitcoin that belonged to Silk Road founder Ross Ulbricht has been seized by the Justice Department in the largest seizure of cryptocurrency in the agency’s history (The Wall Street Journal)
- ?? The Hong Kong Securities and Futures Commission (SFC) ruled on Tuesday to regulate all cryptocurrency exchanges, even if digital securities are not offered by the exchange. The move comes as the SFC attempts to tamp down on illegal activity while providing financial services to exchange users (BTC Manager)
- ?? The Economy Minister of Brazil confirmed the development of a central bank digital currency on Thursday, after launching a study group earlier this year to examine the launch of a digital real (Coin Telegraph)