Investor protections in the checkout process
Updated: May 4, 2020
A Honeycomb account is a bonafide investment account, just like one you'd make with Charles Schwab and the like. According to regulations put in place by the Securities and Exchange Commission (SEC), we are required by law to ensure that you are protected during the investment process.
Honeycomb Credit is registered under SEC File No.: 7-119.
Why we ask for your social security number Making an investment is a serious financial decision, whether it’s $10 million in a multinational company, or $100 in your local cafe. That’s why the U.S. Patriot Act mandates us to ensure that the person investing is indeed you.
This is an important step to prevent money laundering. Using someone else’s social security number is a felony according to the U.S. Patriot Act.
With bank-level encryption security, this information will only be used to process your investment, as well as go into the required 1099-INT form we prepare for you at the end of the year.
Why we ask for your income and net worth From 1933 to 2016, not just anyone could invest in any company; one had to be an “accredited investor” with a certain amount of capital to even have the legal ability to invest in most privately owned businesses (like the ones listed on Honeycomb).
In 2016, changes in U.S. legislation opened up investment privileges to anyone age 18 or over with a U.S. social security number – provided that it’s by way of a regulated crowdfunding platform like the Honeycomb Portal.
In the interest of protecting folks from investing too much of their money into Regulation Crowdfunding platforms, the SEC places a cap on each investor; this cap depends on their income, their net worth, and how much they have already invested in Regulation Crowdfunding campaigns in the past 365 days.
Anyone can invest up to $2200 per year in Regulation Crowdfunding campaigns, and some people can invest more than that if their income or net worth passes certain thresholds. The chart below shows investment limits for different incomes and net worths:
Source: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm All of this information is completely confidential and protected by bank-level security. It will not be used for any purpose other than to inform you how much you can legally invest. For more information, please visit the SEC’s Compliance Guide. Our partners
CrowdEngine Our website infrastructure is built by CrowdEngine. They provide a layer of security with every step of the investment process. You can check out their Infrastructure and Security information here. They are based in Nevada. PrimeTrust This is CrowdEngine’s escrow partner, owned by FundAmerica, which is based in Utah. They open and maintain escrow accounts belonging to businesses running Honeycomb campaigns.