November 30, 2013
We must remain cognizant that the investment limits and regulations proposed for non-accredited investors were proposed to protect Americans from losing all of their money in this extremely risky industry. This is an extremely important regulation and shouldnt be left open to question.
There are already customs arising for regulating investors just as the SEC had predicted. Many entrepreneurs are rushing to fix this problem. My company, Accredify, is building an API that makes it easy for investors to verify and share their investing ability/limit with crowdfunding portals. Another company, Crowdentials, has built a service that makes it easy to share your status with anyone. In addition, there are already numerous law firms and CPAs that offer accredited investor status verification as a service. In addition to all of this, a technology leader in this space, Angel List, has mentioned their own plans to help regulate this space.
By legally requiring crowdfunding portals to use a third-party reasonable step to verify their investors, the SEC will not only enforce this very important statute but will also create a whole new market as well. With todays technology, it is obvious that a self-certification system, which in itself makes the statute obsolete, is not the most progressive or effective way to solve this problem.
-Herwig Gaston Konings, CEO, Accredify LLC