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New SEC updates could make it easier for Crypto companies to raise funds

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  • SEC approves new guide on how crypto firms can raise capital
  • The commision still out to rid the market of unregistered securities token and offering 

The Securities and Exchange Commission (SEC) of the United States has approved new rules and regulations that would be guiding the acts and process of fundraising for cryptocurrency companies in the country.

The commission agreed to increase the limitation it had placed on fundraising for cryptocurrency firms before. This new provision when viewed from the angle of crypto assets and Security Token Offerings (STOs) would be of immense aid to those crypto firms looking to raise more capital for their organization.

The commission in a statement it released said the change was imperative as it was looking to help improve and simplify the hitherto complex guide. This, in simple terms, is the commission’s attempt at increasing the formulation of capital for the crypto firms and also creating more investment avenues for investors.

Crypto firms can now crowdfund an amount as high as $5 million. Regulation A was increased to $75 million. And firms can now raise as high as $10 million using Rule 504 of Regulation D.

The change in the framework also includes the limit to the numbers of investors and the filings for such investors. 

Based on this modification, some crypto firms might want to use the crowdfunding option more often because of the less paperwork involved in this process.

SEC continues to scrutinise crypto industry

The commission has increased the level of its investigation into the crypto industry in the recent while. The commission has also recorded some notable success in its investigation against some crypto firms.

An example is when it concluded its investigation against KIK. SEC accused the firm of running a securities offering that was not registered with the commission. KIK, at the end, had to pay a $5 million penalty fee.

The commission has kept investigating other projects that are believed to be unregistered. However, it is yet to release a statement on how it would deal with the crypto industry at large.

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Kamsi King

Kamsi King

King Kamsi is a fintech and digital currency writer and enthusiast. He is keenly interested in blockchain and cryptocurrency and their global adoption. When not busy with writing, he can be found hobnobbing in forums with the best minds in crypto, both developers and startup founders.

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