What is the definition of crowdfunding and illegal fund-raising?

The boundary between crowdfunding and illegal fund-raising lies in whether it has gone through legal procedures and the approval of the approval authority. Crowdfunding that has not gone through legal procedures and the approval of the approval authority is illegal fund-raising. According to relevant national regulations, illegal fund-raising refers to units or individuals raising funds from the public by issuing stocks, bonds, lottery tickets, investment fund securities or other debt certificates without approval from relevant departments in accordance with legal procedures, and promising to raise funds within a certain period of time. The act of repaying principal and interest or giving returns to investors in currency, kind or other ways. Illegal fund-raising is often initiated by individuals, who gather a large amount of money and invest it in several projects unknown to the borrowers, with the promise of returns. In the Internet age, information about each project is made public through crowdfunding websites, and investors can use the Internet to Information eliminates the information asymmetry between entrepreneurs and investors. It is open, transparent, and transparent. Information can be checked at any time. Entrepreneurs can maintain communication at any time, which greatly reduces risks. In terms of legal protection, equity crowdfunding ultimately takes the form of a limited partnership to invest in projects and is protected by law. If a partnership is not established after illegal fundraising, investors cannot become shareholders. Dongzhibei Equity Crowdfunding is responsible for project review and due diligence, issuing reports, and being responsible to investors. Both parties set up a limited partnership to invest in projects on an equal and voluntary basis. They have a thorough understanding of information, various risks, and clear income distribution. It is an open and transparent act, which is completely different from the uncertainty and information asymmetry of illegal fund-raising.

The objective constitution of illegal fund-raising activities

1. Absorbing funds without the legal approval of relevant departments or using the form of legal operations;

2. Through media and promotion Promote the public to the public through meetings, flyers, mobile phone text messages, etc.;

3. Commit to repay principal and interest or pay returns within a certain period of time in the form of currency, physical objects, equity, etc.;

4 , absorb funds from the public, that is, unspecified objects in society.

Legal basis:

"Criminal Law"

Article 176 of the crime of illegally absorbing public deposits, illegally absorbing public deposits or absorbing public deposits in disguised form, disrupting the financial industry If the amount is huge or there are other serious circumstances, the sentence is to be not less than three years but not more than 10 years of fixed-term imprisonment or criminal detention, and also to a fine of not less than 20,000 yuan but not more than 200,000 yuan. A fine of not less than RMB 10,000 but not more than RMB 500,000 shall be imposed. If a unit commits the crime in the preceding paragraph, the unit shall be fined, and the person directly in charge and other directly responsible personnel shall be punished in accordance with the provisions of the preceding paragraph.