Under Rule 506(c), issuers may offer securities through means of general solicitation, provided that:
• all purchasers in the offering are accredited investors,
• the issuer takes reasonable steps to verify their accredited investor status, and
• certain other conditions in Regulation D are satisfied.
This Offering is limited to accredited investors only
An “accredited investor” is:
• a bank, insurance company, registered investment company, business development company, or small business investment company;
• an employee benefit plan (within the meaning of the Employee Retirement Income Security Act) if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
• a tax exempt charitable organization, corporation or partnership with assets in excess of $5 million;
• a director, executive officer, or general partner of the company selling the securities;
• an enterprise in which all the equity owners are accredited investors;
• an individual with a net worth of at least $1 million, not including the value of his or her primary residence;
• an individual with income exceeding $200,000 in each of the two most recent calendar years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
• a trust with assets of at least $5 million, not formed only to acquire the securities offered, and whose purchases are directed by a person who meets the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment.
Early growth in the blockchain and cryptocurrency market is being driven by evolving and increasingly “regulatory friendly” frameworks, less anonymity creating more orderly markets, increasing digitization of financial services, an increasing trend to decentralization and expected demand-side growth for services.
Despite impressive growth, the market is nascent, characterized primarily by tech enthusiasts, early adopters and speculators. While businesses and merchants don’t yet know what to think about it. A recent study showed that 92% of Americans (~275 million) have not purchased cryptocurrency and only 8% (~ 26 million) plan on investing in cryptocurrency in the future.
Challenges to Mass Adoption of Cryptocurrencies
1) Disinterested or feel there is no need (~40%)
2) Too risky (35%)
3) It’s a bubble (33%)
4) Too complicated (27%)
5) Too difficult to use (11%)
6) It’s a scam (18%)
7) Too many fees (6%)
Until these challenges are more effectively resolved consumers will be slow to demand for and adopt cryptocurrencies as part of their daily transactional behavior and merchants will be slow to adopt systems and frameworks to accommodate.
Scratch is developing an all-in-one, turnkey platform designed to encourage broader adoption by addressing and resolving these challenges, making blockchain-based transactions using cryptocurrency as well as fiat currency more practical to more stakeholders throughout the financial services and payments value chain.