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Comment by wgerard | Hacker News Reader

Huh, I was wondering if this was legal (seems like an unregistered securities offering, which has semi-strict requirements even after 2012) and then read this at the bottom:

> The securities offered by the issuers on the Site (the "Securities") may be sold only to (A) investors who are (i) "Accredited Investors" as defined in Rule 501 under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or (B) certain eligible investors who are not "U.S. persons" as defined in Rule 902 under the Securities Act, or (C) otherwise eligible to invest in Securities as discussed elsewhere on the Site

I'm assuming C) covers general crowdfunding investors but I also thought that you still had to check net worth/etc. which I didn't see going through the site anywhere (though admittedly I did a very cursory glance).

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There's actually a recent ruling from the SEC that allowed raising funds from non accredited investors when it comes to crowdfunding. So it's actually legal to sell equity in crowdfunded projects to pretty much everyone [0]. But there are a LOT of rules and limitations around the whole process, which makes sense imo

[0] https://www.sec.gov/news/pressrelease/2015-249.html

There's a two-tier system, one is just like Kickstarter where consumers "pre-order" the game and one for "accredited investors". Most people aren't getting a return on the investment, just the game/merch.

I clicked through on the site, they are allowing unaccredited investors. They did asked for my net worth and annual income. The limit on investing this way is, must be a multiple of $5,000 and cannot exceed 10% of your annual income.

As long as they don't do any advertising they should be okay. But if a single non-accredited investor lands on their website as the result of clicking an ad, the law has been broken.

"But if a single non-accredited investor lands on their website as the result of clicking an ad, the law has been broken." + invests. Right? Otherwise, AVG which is all over social media would be at fault.

Soliciting investment from non-accredited investors is illegal. I learned this from an attorney who specializes in securitization when I was exploring doing a crypto business. It was also explained to me that local angel investing groups exist pretty much for this reason. They create a semi-private network of accredited investors which can be used by the local community to solicit capital in a legal way.

You don't have to "actively" seek investment from non accredited investors for it to be illegal. So a crypto currency could still absolutely be subject to action from the SEC even if they only had a "invest now" option on their website without promoting it . It's just that the SEC doesn't care as much and focuses more on the big fish. Still, passively selling illegal securities is still illegal :)

Fig is legal because of a recent crowdfunding law that made it possible to buy equity while funding a project. I think the website was created right after the law passed too, but maybe my memory is fuzzy here

>+ invests. Right?

Just offering an unregistered security to the public (without any exceptions applying) is a violation.

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