The U.S. Securities and Exchange Commission (SEC) has increased limits dictating how much capital companies can raise before registering in a move that could be a boon for security token offerings (STOs).
- Companies can now raise $5 million in total under Regulation Crowdfunding provisions (previously: $1.07 million), $75 million under Regulation A+ (previously: $50 million) and $10 million under Rule 504 of Regulation D (previously: $5 million), the SEC said.
- As CoinDesk reported in March, the heightened caps could make it easier for startups to conduct security token offerings without running afoul of the regulator.
- SEC also relaxed certain restrictions governing document filing, solicitation practices and accredited investor investment limits in the Monday announcement.
- Chairman Jay Clayton said the changes will ease the burden of capital formation for small and medium-sized businesses.
Read more: SEC Proposal Could (Eventually) Unleash Security Token Sales
In addition to making it easier to raise funds, startups will be able to raise more money and provide themselves a bit more runway as they try to launch operations than under the old caps.
Disclosure
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.