ArmInfo.At the February 8, 2022 meeting of the Board, the Central Bank approved a package of by-laws regulating investment-based crowdfunding services (crowdfunding through the sale of securities). Under these regulations, investment services providers licensed by the Central Bank will be able to offer services of a crowdfunding platform operator to the public. The official website of the Central Bank of the Republic of Armenia reports.
According to the source, entrepreneurs, including start-ups and SMEs, will be able to attract up to AMD 2.5 billion financing annually from investors via crowdfunding platforms through the sale of securities in a simplified manner, without extensive transparency requirements (e.g. prospectus and other disclosures). "New investment opportunities will be created for investors through crowdfunding platforms (online, 24/7, fast, small-scale investments, etc.). Anyone can be an investor through crowdfunding platforms. Investments through crowdfunding platforms are generally aimed at financing new projects with the expectation of rapid and high profitability. In this regard, investors should, to the extent possible, consider the risks related to the loss of invested money or liquidity, as well as thoroughly review all available investment information in advance. It should be noted that, unlike other public offering of securities, documents (information) published on crowdfunding platforms are not subject to the registration by the Central Bank, but are subject to the assessment (due diligence) process by the relevant crowdfunding operator. The Central Bank is not responsible for the correctness and clarity of the documents (information) published on the crowdfunding platforms, as well as for the safety and return of investments made on these platforms," the CBA notes.
It should be noted that crowdfunding is a mechanism for attracting funding for the purpose of selling a product, holding an event,, supporting businesses, etc. It often happens that there are no funds to implement really cool ideas. However, there are many people in the world who are ready to support a good idea and invest in its implementation. That's what crowdfunding platforms are for. The advantage of crowdfunding is that it allows you to get financing without the participation of banks, venture capital funds and exchanges. With the advent of crowdfunding platforms, this process has become much easier and more democratic. For the author of the project, this is an opportunity to raise funds for hisher project without loans and transfer of copyright. A crowdfunding platform is not a community of wallets, as it sometimes seems to people from the outside. First of all, this is a service that allows the author of an idea to meet with supporters who are able to support. According to the global assessment of crowdfunding platforms, the site itself provides approximately 20-30% of its audience.
