Biden’s Regulatory Freeze Unsettles Crowdfunding Advocates
January 29, 2021
President Joe Biden’s ongoing “regulatory freeze” could enable agencies like the U.S. Securities and Exchange Commission to postpone or reconsider recently approved rule changes relaxing limits on private capital raising, a prospect that makes equity crowdfunding advocates uneasy.
The SEC busily approved a slew of new rules in late 2020, including various amendments easing restrictions on private capital-raising. The agency in November narrowly approved lifting the annual fundraising limits for equity crowdfunding campaigns from $1.07 million to $5 million and Regulation A offerings, akin to small initial public offerings, from $50 million to $75 million.
Farrell Fritz PC partner Alon Kapen said his clients were excited about the package of amendments, particularly crowdfunding provisions allowing higher offering limits and personal investments. But he is now concerned the changes will be delayed at a minimum.
“Now there is a dark cloud hanging over this,” said Kapen, who advises entrepreneurs and emerging growth companies.
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