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 $100,000 in a mutual fund 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. All of this information is completely self-reported.
As of March 15, 2021:
Anyone who is 18 years or older and has a U.S. tax identification number (such as a social security number) is eligible to invest $2,500 in a rolling 365 day period.
If either your income or your net worth is below $124,000 then your investment cap will be 5% of the greater of your income or net worth (if that value is less than $2,500, then your investment cap will be $2,500).
If both your income and net worth are greater than $124,000, then your investment cap will be based on 10% of the greater of your income or net worth.
All of this information is completely confidential and protected by bank-level security. This information is used to inform you how much you can legally invest during the investment process. For more information, please visit the SEC’s Compliance Guide.