Was crowdfunding illegal before?

I thought it was just an unregulated area.

If I'm not mistaken the limit is like up to $1 million.  Anything larger than that you need to follow SEC rules like getting investments from accredited investors and the like.  The idea is that regulation can limit the number of scam investments.  Though with the likes of Madoff, Stanford, and others it seems like you can still get away with it at a phenomenal magnitude.

It's rather about being allowed to buy shares in a startup company that might not immediately meet all the requirements to hand out stock as opposed to only donating for something you like.

If I give 10 USD to charity (not the stripper...), I don't really expect something back - it's enough for me to see that the world is a better place in part of because I contributed that money.
If I buy 1/10 000 of a company with 100 USD because it needed 1 million USD and decided to hand out shares for that, I'm expecting that this company is run properly, according to regulations, that I can sue someone should they just want to take the money and run and so on.

If you look at a lot of GLBSE "companies", GLBSE is already kinda used like this, but it's sometimes very hard for me at least to trust the "company" owners. Scams also already happened there or at least things that would qualify to be VERY close to being classified as scam (or at least a very bad investment). Having a more formal and also legal way of doing such things is something great - and I would LOVE to see an accredited crowdfunding platform in the US that accepts bitcoins too for investing in startups.

Correct me if I'm wrong, but wasn't there a thread a few months back about making Bitcoin a stock based entity? If so, or not, even, perhaps making a certain segment of Bitcoin a stock based entity. Not sure which or how, but food for thought nonetheless.

~Bruno~