So Crowdfunding Does Need Regulation

So are we to understand that regulation is a good thing and necessary to protect investors in the crowd? Well it appears so. On March 23, 2012, at 2:29 p.m. EDT Marketwire issued a press release announcing the creation of the Crowdfund Intermediary Regulatory Association (CFIRA). Its mission is to provide investors “protection and market integrity through effective and efficient regulation of those within the crowdfunding industry”. But wait on March 21, 2012, the same Marketwire issued a press release announcing the launch of the Crowdfunding Accreditation for Platforms Standards (CAPS) program. “The CAPS program establishes standards for crowdfunding operations and aims to protect investors from fraud.”

I and others have been writing for several months that the notion of an unregulated format on the Internet for the raising of capital was an invitation for fraud. I guess the Crowdfunding supporters have finally realized that we were right. I applaud this move to protect investors and legitimate businesses seeking to do business on this new platform.


© Copyrighted 2012 by Sharon M. Davison. Reuse permitted with attribution.

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