Late in 2013, the Securities and Exchange Commission (SEC) proposed new rules that would, if approved, authorize the use of the Internet for so-called crowdfunding campaigns seeking up to $1 million per 12-month period from unlimited numbers of investors. As proposed, these campaigns would be exempt from traditional securities registration requirements.
The use of crowdfunding to date has typically involved raising modest sums of capital, in effect donations, from many small contributors over the Internet in order to fund a particular artistic project, such as the making of a film or musical CD. As employed in the U.S., it has not involved an investment through the sale of securities or participation in profits from a project; rather, contributors of funds have received a token of value, such as a film credit or a commemorative CD.
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