The U.S. Securities and Exchange Commission (SEC) has changed some exemption rules, making it easier for crypto companies to raise funds. The rule changes increase the collection limits for the Regulation Crowdfunding, Regulation A and Regulation D Rule 504 offerings.
SEC’s new rules allow crypto companies to raise more money
The second announced On Monday, it changed a number of rules regarding various exemptions. In addition to other changes, the regulator has “increased the offer limits for offers from Regulation A, Regulation Crowdfunding and Rule 504” and revised “certain individual investment limits,” the announcement said. The changes are effective 60 days after publication in the federal register.
“We are increasing the maximum allowable bid amounts for certain exemptions,” explains SEC Commissioner Hester Peirce, aka Crypto Mom. “By increasing the Tier 2 offering limit of Regulation A from $ 50 million to $ 75 million and the Regulation Crowdfunding offering limit from $ 1.07 million to $ 5 million, we are seeking to reduce costs relative to the amount under these exemptions will be retrieved. “
Regulation A is an exemption from registration on the public offer; it has two layers of presentation. Level 1 is for offers of up to $ 20 million in a 12-month period. Currently, Tier 2 is for offers of up to $ 50 million in 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 Rule 504 bidding limit from $ 5 million to $ 10 million, we are trying to encourage more issuers to take advantage of this underused exemption to provide regional offers for state coordinated assessment programs. “
Currently, Rule 504 of Regulation D offers eligible companies a registration exemption when they offer and sell up to $ 5 million of their securities in a 12-month period. Peirce noted:
We are making targeted improvements to a regulatory program that unnecessarily hampers capital formation and unnecessarily restricts investors’ opportunities to participate in economic growth.
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