While the S.E.C. dawdles, states are rushing to adopt their own crowdfunding rules. Ironically, it might be the one thing that saves it from a regulatory death grip. The crowdfunding industry is eager for guidelines, so it has started to go to the states to work around the S.E.C.’s inertia
In 2012, President Obama signed the Jumpstart Our Business Start-ups Act, otherwise known as the JOBS Act. The law was an odd creature. It purported to open up the capital markets and create jobs by loosening regulations on initial public offerings and allowing for crowdfunding. Yet there was little evidence to support that watering down of any of these regulations would create jobs. Instead, the bill mainly appeared to be catering to special interests and was intended to show that Congress was doing something, anything, to create jobs. Crowdfunding in particular was pushed by a number of special interests that — you guessed it — wanted to start crowdfunding sites.