Thousands of small investors have reportedly lost their hard-earned money in China after hundreds of online peer-to-peer lending sites that were reportedly promoted by the government crashed last week.
Lending platforms such as Tourongjia.com promised double-digit returns to its investors, which made them attractive options for a lot of people who wanted to earn some profit.
The Securities and Exchange Commission voted on Wednesday for a resolution that will allow startups to raise funding over the internet from almost every American who wants to invest.
This is the first major step towards equity crowdfunding, which is exactly what it sounds like — crowds of people put up money in exchange for securities in a company that isn’t publicly traded. What could possibly go wrong?