SEC to sanction unregistered crowd funders

The Securities and Exchange Commission (SEC) has directed investment crowd-funding portals and platforms to register in line with the eligibility criteria for raising funds or cease operations by June 30, 2021.

In a statement, the commission said the rules governing crowd-funding business came into effect on January 21, 2021, to ensure investor protection, while encouraging innovation in the conduct of securities business.

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The commission, however, said there was a transitional period of 90 days when the operators were expected to register.

“While the transitional period elapsed on the 21st day of April 2021, the commission hereby directs all existing investment crowd-funding portals/digital commodities investment platforms to note the requirements and eligibility criteria for raising funds through and/or operating a crowd-funding portal and comply with the registration requirements or cease operations by the 30th of June 2021,” it said.