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We have written in the past about the different methods that companies in the United States can use to raise funds via an ICO / token offer. One of the main methods we mentioned was the use of A + regulation, something traditionally used by small businesses for the IPO that was adopted by cryptographic companies. currency in the United States. has severely limited the number of companies that can actually raise under it. In addition, it is more difficult for small businesses to launch IPOs in the current economic climate of rising long-term and constant inflation.
That is why the US House of Representatives passed the “Regulation A + Improvement Act” which allows for a 50% increase in the ceiling of companies that can bid on securities while being governed by the RegA +.
What is RegA +?
The RegA + is a regulation adopted under the Jobs Act, which allows a more streamlined process than the traditional IPO and which allows non-accredited investors to invest. In addition to allowing medium-sized businesses to raise money more easily, RegA + allows for the participation of retail investors: a feature of cryptocurrencies. This also allows for broader marketing to investors, which has been and continues to be used by country offices.
Despite its limited scope, RegA + has been well used by companies that have raised more than $ 600 million since the month of October using the settlement. This trend has not been ignored by cryptographic markets either.
The ICO Reg A +:
It is only expected that the trend of Reg A + value offers will develop after the adoption of this new regulation. The following ICOs have already used Reg A + for their offers.
- Gab ICO: An ad-free social network for creators who believe in freedom of expression, individual freedom and the free flow of information online
- RideCoin ICO: A decentralized carpooling market based on the blockchain.
- WeDemand ICO – Allows fans to bid on concerts with smart deals and tools to track live events
All the aforementioned ICOs are presented on a site called StartEngine which now announces the possibility of “launching an ICO”. The founder of Start Engine said last month in an article on HACKERNOON that Reg A + is “the future of ICOs,” especially given the crowdfunding regulation of $ 1.07 million a year.
Despite the fact that RegA + reduces securities offer regulation and makes it easier for ICOs in the United States, this does not replace the unregulated ICO market of early 2017. Here’s why:
- Trade approved by the SEC is to be used exclusively. This is a bit of a hindrance, and as far as crypto goes tZERO is the only high profile exchange that would qualify
- Reg A + requires anti-money laundering controls for all investors, increasing overhead costs for ICOs
- Reg A + requires “offer circulars” that are a bit more detailed than the traditional white paper
There are also two types of Reg A +, Tier 1 and Tier 2 offerings. In a Tier 2 offering, companies must undergo an initial and annual audit and publish information on biannual financial performance. . The alternative is a Tier 1 Reg A + which is limited to $ 20 million but significantly reduces regulatory requirements.
SEC regulations still have a long way to go before it is viable for ICOs and these changes help pave the way. I have no doubt that at least some IFAs will adopt these regulations in the future.
Image from Shutterstock to photo
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