Crowdfunding Blog

EU Takes Aim At Crowdfunding

The European Securities and Markets Authority (ESMA) is looking to promulgate a set of rules to regulate the broad spectrum of crowdfunding. ESMA is concerned that by limiting the type and number of investors in projects, crowdfunding platforms could help businesses evade requirements to publish a prospectus. This means crowd investors have little information and face high failure rates. ESMA also alleges platforms might be able to avoid holding enough capital to keep themselves solvent.