The Securities and Exchange Commission (SEC) remains optimistic about digital crowdfunding platforms despite recent setbacks.
SEC chairperson Emilio Aquino acknowledged the challenges, stating to the media,
“We experienced birth pains. That’s the same case for the other jurisdictions like Indonesia and Malaysia. It’s the same. So we’re sorting it out but that does not mean that we’re closing the doors as far as the use of digital platforms are concerned.”
The SEC has been advocating for crowdfunding as an accessible and viable capital-raising option for micro, small, and medium enterprises (MSMEs) and startups to facilitate business expansion.
Crowdfunding, a fundraising activity typically conducted by startups and SMEs, allows the public to support or fund a business idea through an online platform. SEC chairperson Emilio emphasised the importance of digital crowdfunding platforms, saying,
“We want them to tap, especially the digital platforms because the whole idea is that it will allow the SMEs also as source of capital raising opportunities for them.”
In the Philippines, there are currently three licensed crowdfunding intermediaries: SeedIn Technology Inc., Investree Philippines, and Eastern Securities Development Corporation. However, Investree, the country’s first crowdfunding intermediary and funding platform, announced that it is ceasing operations.
Filinvest Development Corp. (FDC) recently stated that its subsidiary f(dev) Digital Innovations and Ventures Inc. and Investree Singapore Pte. Ltd. have agreed to wind down Investree Philippines. The company will apply for the shortening of its corporate term up to 30 September 2025.
Since its inception in 2020, Investree Philippines has supported over 180 businesses and funded more than 800 applications across various industries as of 2023.
Meanwhile, the SEC has initiated a special audit on SeedIn following concerns about a possible fraud committed by its former president, Edison Tsai. SeedIn reported Tsai’s involvement in a potential fraudulent act.
Emilio remarked,
“Most definitely we learn from the reports, the audits that we conduct to plug those possible loopholes. We are checking that. But right now, it’s under review.”
According to SEC regulations, SMEs engaging in crowdfunding no longer need to register securities with or secure approval directly from the SEC before soliciting investments from the public.
Featured image credit: Edited from Freepik
