Crowdfunding is mostly unregulated. From 1 April 2014, the Financial Conduct Authority (FCA) started to regulate some forms of crowdfunding in the UK.
The FCA regulates:
- Loan-based crowdfunding: also known as ‘peer-to-peer lending’, this is where consumers lend money in return for interest payments and a repayment of capital over time.
- Investment-based crowdfunding: consumers invest directly or indirectly in new or established businesses by buying investments such as shares or debentures.
The FCA also regulates payment services provided in connection with:
- Donation-based crowdfunding: people give money to enterprises or organisations whose activities they want to support.
- Pre-payment or rewards-based crowdfunding: people give money in return for a reward, service or product (such as concert tickets, an innovative product, or a computer game).
Find out more about the FCA’s crowdfunding policy and how you can protect yourself.