Legal Regulation of Crowdfunding

There are many examples of financing the projects at the expense of raising funds from a large number of people. With the development of the Internet and social networks, the form of crowdfunding has gained rapid development. The limitless possibilities of the Internet make it possible to seek finan...

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Bibliographic Details
Main Authors: Rustem, Magizov, Natalya, Yushchenko, McKeown, Tara
Format: Conference Proceeding
Language:English
Subjects:
alternative financing
Companies
crowdfunding
crowdsourcing
FinTech
Internet
investing
investment platforms
investors
Law
Legislation
Regulation
Supply and demand
Technological innovation
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Summary:There are many examples of financing the projects at the expense of raising funds from a large number of people. With the development of the Internet and social networks, the form of crowdfunding has gained rapid development. The limitless possibilities of the Internet make it possible to seek financial support from a large number of people and often completely for free. Typically, shares or bonds are issued to fund large companies or projects, but this is not possible for smaller projects, usually with no financial benefit. Therefore, more and more individuals, creative companies and entrepreneurs resort to crowdfunding every year. Crowdfunding has been known to the Russian practice for several years. However, the concept of this phenomenon has not yet been defined in the legislation. In jurisprudence, there are only single examples of disputes between participants of crowdfunding projects. Every year all over the world crowdfunding raises on average 30 - 50 billion. Until 2017 in Russia, the crowdfunding market had a fairly modest size. Since the cryptocurrency hype 2017 - 2018 resulted in fundraising for thousands of projects via ICO (initial coin offering) there was a need for regulatory framework for this area. January 1, 2020, the Act on crowdfunding has entered into force, marking a new era of the Russian investment market, legalizing the forms of investment that have emerged in recent years.
ISSN:2161-1351
DOI:10.1109/DeSE54285.2021.9719475