Crowdfunding as an Emerging Fundraising Tool: With Special Reference to the Malaysian Regulatory Framework

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Apnizan Abdullah

Abstract

The booming of the crowdfunding industry all over the globe has prompted many countries to amend their laws and regulations. Many brilliant ideas and projects, be it business ventures or social causes, have been successfully funded via crowdfunding. The technological advancement through the Internet has made crowdfunding viable as a supplementary method to traditional fundraising mechanisms. This paper discusses the development of crowdfunding worldwide, including Islamic crowdfunding and the regulatory regimes implemented in various jurisdictions. A special reference is made to the Malaysian regulatory framework since Malaysia is one of the countries that recognises the emergence of crowdfunding as a fundraising vehicle. The paper makes various recommendations to government regulators to tackle some loopholes in the existing legal framework in Malaysia.

Key words: crowdfunding, equity crowdfunding, Islamic crowdfunding, community based crowdfunding, legal framework, charity.

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