Too often, companies are vague about the safeguards they’ve put in place. We never want that to be the case at Crowd Street. We’re proud of the above-and-beyond steps our compliance team has taken, working to build a secure experience for our members — and we think you should know about them.
So in this piece, we’re laying out the specific actions we’ve taken in an effort to build a platform grounded in regulatory rigor, investor protection, and long-term trust.
The Rules That Opened the Door for Platforms Like Ours
Crowd Street was founded in the wake of the JOBS Act, which made it possible for issuers to publicly advertise private market offerings to individual accredited investors. Before that, access to private markets typically came through personal networks, placement brokers, or wealth managers.
The JOBS Act, which eased the restrictions surrounding general solicitation or advertising for certain private securities offerings exempt under Regulation D,
also allowed platforms like Crowd Street to facilitate these offerings without registering as broker-dealers. Many platforms — including Crowd Street in its early days — have relied on this exemption.
This probably raises a couple of questions.
First, what exactly is broker-dealer status, and why does it matter? Second, if it’s important, why did the JOBS Act exempt issuers from it?
“Broker-dealer” is an entity type that is in the business of buying or selling securities and must register with the Securities and Exchange Commission (SEC) and become a member of a self-regulatory organization (SRO), FINRA, the industry’s self-regulatory body. This designation requires a certain level of compliance: for instance, employees must pass licensing exams, the firm must implement written supervisory procedures, and every offering must be reviewed under strict rules governing accuracy, due diligence, and investor protection.
When the JOBS Act passed in 2012, Congress created an exemption from broker-dealer registration to help new platforms get off the ground. The goal was to reduce friction in capital formation — especially for startups and small businesses — by allowing online marketplaces to connect accredited investors with private offerings without the cost and complexity of becoming a broker-dealer.
Why Crowd Street Became a Registered Broker-Dealer
This exemption helped Crowd Street get started, but we ultimately chose to pursue broker-dealer registration.
Not because it became required, or because all our peers were doing it — neither is true., We did it because we wanted to build a stronger, more trusted platform for our members. Voluntarily entering a rigorous compliance process with the SEC and FINRA was a key step in making that happen.
The process took nearly a year. It started with a detailed FINRA application outlining our intended model and offerings. From there, we worked through an extensive regulatory checklist, which included: registering in every state we operate in, licensing employees through exams like the Series 79 and Series 7, and building a full set of written supervisory procedures to govern how we operate.
We also implemented new operational standards. That included setting up escrow accounts for investor funds in most offerings and formalizing how we conduct due diligence — not just on offerings, but on the sponsors behind them. Every deal must meet consistent standards before it’s presented to our members.
Investor onboarding changed too. Members now open accounts directly with Crowd Street Capital, submit documentation to verify their accreditation, and pass anti-money laundering (AML) checks. These steps take a little more time, but they’re critical to building the kind of secure, trustworthy environment we believe investors deserve.
Most importantly, becoming a registered broker-dealer is an ongoing commitment. As a FINRA member firm, Crowd Street Capital is subject to continuous regulatory oversight, including routine examinations, periodic audits, and strict reporting requirements. FINRA regularly reviews our supervisory procedures and holds us accountable for maintaining the standards we’ve committed to. That level of scrutiny is exactly what gives the designation its weight.
SOC 2 Compliance: Another Layer of Trust
Crowd Street's compliance commitments are far-reaching. In addition to ongoing oversight from FINRA and the SEC, we complete a SOC 2 Type I audit: an independent assessment of our data security controls, conducted in accordance with the AICPA’s Trust Services Criteria. This audit evaluates how we manage sensitive information and ensures we have safeguards in place to protect member data.
For members, it’s another way we help ensure that the platform you’re using is stable, secure, and built with long-term confidence in mind.
Compliance You Can Actually See
Taken together, these efforts reflect a core belief at Crowd Street: investor trust isn’t something we take for granted. It’s something we work to earn every day through transparency, accountability, and high standards.
The next time you evaluate a private market offering, it may be worth asking: what standards is this platform following? Are they registered as a broker-dealer? Are they subject to third-party audits? Are they even telling you?
At Crowd Street, we’ve made our answer clear.
