Regulation A+ Improvement Act of 2017

Floor Speech

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Mr. DAVIDSON. Mr. Speaker, I rise today to offer my support for H.R. 4263, the Regulation A+ Improvement Act. I greatly appreciate my colleague, Representative MacArthur, for this bill and for our chairman for moving it through our committee, and, frankly, my colleagues from across the aisle who came together to recognize the need for this bill.

As has already been stated, this has broad implications for small capital companies. I spent the past 15 years, prior to coming to Congress, growing small manufacturing companies, and I can greatly appreciate the challenge of raising capital. This is another means of doing that, but I want to highlight another area that it might be suitable.

With approximately $4 billion of capital raised worldwide in 2017, it is fair to say that initial coin offerings are just another great way for startups to raise capital and grow their businesses. ICOs in Regulation A+ could work great together, and with Mr. MacArthur's bill, they can work even better.

An example of this harmonization is the investor-based Reg. A+ allows investors of any wealth to participate. This Democratic process is a pillar for ICOs in terms of the premise behind distributed ledger technology.

Another provision is anti-money laundering. Reg. A+ requires the validation of investors, as well as background checks on the principles of offering companies. This goes hand in hand with improving the credibility of ICO business practices and reducing the risk of loss.

Compliance with Reg. A+ would mean a disclosure memorandum, not just a white paper. Reg. A+ provides ICO entrepreneurs and their startups with a viable path to compliance with SEC security regulation. So it is important that we have guardrails established in this explosive new industry, while not hampering the ability to grow the business. I urge my colleagues to support this vital legislation.

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