The Future of Dispute Resolution for Crowdfunding Websites

    View Authors June 2015
    Online crowdfunding websites are a fast growing FinTech phenomenon on which not just accredited, but also non-accredited investors may invest in businesses, subject to certain restrictions that govern the use of crowdfunding and responsibilities of intermediaries. For example, the authors are aware of potentially over one hundred crowdfunding websites in the real estate space. Setting aside the issue of whether a large number of potential real estate crowdfunding investors may create Real Estate Investment Trust (REIT) problems for these real estate crowdfunding websites, it is good practice for crowdfunding websites in general to put in place arbitration and anti-class action terms of use, along with practices and mechanisms to improve the terms of uses’ enforceability, and to the extent possible under the crowdfunding websites’ business model, avoid being investment advisers.