The U.S. Securities and Exchange Commission (SEC) has changed some of its exemption rules, making it easier for crypto-based companies to raise funds. The announcement was made by the SEC on Monday while highlighting some rules that are subject to several exemptions.
The regulator also increased “the offering limits for Regulation Crowdfunding, Regulation A and Regulation D’s Rule 504 offerings” and has revised “certain individual investment limits.” The amendments will take effect 60 days after publication in the Federal Register.
In a statement directed to the public, the Commissioner of SEC, Hester Peirce (also known as Crypto Mom), said:
“We are increasing the maximum permitted offering amounts for certain exemptions. By raising the offering limit under Tier 2 of Regulation A from $50 million to $75 million and the Regulation Crowdfunding offering limit from $1.07 million to $5 million, we seek to minimize the cost relative to the amount raised under these exemptions.”
The rules from the U.S Securities and Exchange Commission (SEC)
Regulation A is an exemption from public offering registration, as it has two offering tiers: Tier 1 is for offerings of up to $29 million in 12 months. And Tier 2 is currently for offerings up to $50 million in 12 months. Regulation Crowdfunding enables eligible companies to offer and sell securities via crowdfunding.
Describing the third exemption, the commissioner said:
“By increasing the Rule 504 offering limit from $5 million to $10 million, we want to encourage more issuers to use this under-utilized exemption. It will help us conduct regional multistate offerings, and to make use of state coordinated review programs.”
Rule 504 of Regulation D currently gives eligible companies a registration exemption when they offer and sell up to $5 million of their securities within 1year. Peirce also added:
“We are ensuring specific improvements to regulatory schemes that unnecessarily hinder the capital formation of most companies and hampers investors’ opportunities to take part in economic growth,”