The U.S. Securities and Exchange Commission (SEC) has raised the fundraising cap for regulated crowdfunding campaigns. The cap has risen from $1.07 million to $5 million, says in a statement.
Under regulated crowdfunding, projects offered securities without SEC registration. To do this, they were required to cap investments by non-accredited investors at $1.07 million.
The amendments ease startups’ access to funding within the legal framework. In addition to increasing the cap, the regulator removed restrictions for accredited investors, and changed how the amount available to invest is calculated for non-accredited investors.
“For many small and medium-sized enterprises, our favourable framework is the only viable channel for raising capital,” said SEC Chairman Jay Clayton.
In 2019, the SEC chairman said that the agency’s measured and forward-looking approach to regulating cryptocurrencies fostered innovation and capital formation while protecting investors.
Earlier, the U.S. Department of Justice called digital assets a challenge to law enforcement. The agency added that, with the right approach, they can be beneficial to society.
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