Kickstarter kicked Australia's financial services regulator, the Australian Securities and Investment Commission (ASIC), has run its eye over crowdfunding services and decided some effectively issue securities under Australian law. “Depending on the particular crowd funding arrangement, ASIC's view is that some types of crowd …
Slightly relevant, I think:
A good way to raise funding? It can be , BUT
The idea is that if the project fails to materialise the investors are supposed to get their money back.
This is of course very unlikely.
It's a great way to scam people as the funding amounts can generally be very low, as small as a fiver and how many investors would be likely to complain. They'll see it as buying a lottery ticket.
They'll cop flack for this, but I think they've got a point. It's only a matter of time until one of those big crowdfunded projects crashes and burns big time (fact of life, projects sometimes fail, simple as that), and people will be pissed off.
Too many people are visiting kickstarter/etc and putting money in treating it like a pre-order when they really need to understand it's speculative investment.
Frankly I'm amazed someone hasn't managed to scam people with a project yet.
You think it's not been done yet?
The best scam is where the mark doesn't realise it's a scam. This happens a lot!
It's like social security!
I'll rephrase LarsG, I'm amazed I haven't heard about a scam already. Most scammers/criminals are stupid, that's why they are breaking the law for a few grand rather then breaking the law for billions.
I'm thinking about .....
One more thing that will go online and offshore then. Seems nobody in Oz realises its easier and cheaper to NOT do business on Oz. Just look at their 'solution' to excessive corporation tax, retail sales collapse, etc.
Not a clue amoungst the lot of them.
Well, we've got 'Troll Bridge' so it can't be all that bad.
All the crowdsourcing web sites I've looked at make it clear that what you are engaging in is speculative investment (usually using kinder words, but not unclear though).
AC has gotten to the root of the issue in a way that the reg article itself did not though. The key part of the ASIC release is "the owner of Australian-based websites that facilitate this crowd funding may be legally considered as the person making an offer to arrange for the issue that financial product."
So this doesn't affect kickstarted.com (which I sincerely doubt is hosted in Australia) but does affect crowdsourcing startups (not crowdsourcing projects) hosted in Australia. So this is months (?) of work by the regulator who has just announced: by all means do this - just make sure you don't do it in our jurisdiction (and create jobs in Australia, use the Australian broadband network, use Australian data centres etc. etc.).
The better approach by ASIC would have been to cite this as a weakness in existing regulation and recommend that the regulation be amended for special cases of 'fundraising below $xyz (or maximum exposure by an individual of $abc). The fact they haven't (or were not given scope to) suggests some level of political involvement.
Its not likely to be long before the International Banks put a blocker on the up and coming interloper who is syphoning off their daily bread.Tie them up in red tape and let them sweat will probably be the solution of the men in tweed.
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