Designing equity crowdfunding regulations for legal certainty in the digital era

Abstract

Equity crowdfunding serves as an alternative financing mechanism for micro, small, and medium enterprises (MSMEs) in Indonesia, yet it faces challenges due to insufficient legal certainty for stakeholders. This lack of clarity hampers its growth as a viable financing option for MSMEs. This study employs normative legal research, analyzing existing legal frameworks governing equity crowdfunding through statutory, comparative, and conceptual approaches. The findings reveal three key points: First, current Indonesian regulations on equity crowdfunding fail to ensure legal certainty for involved parties, leaving gaps in protection and enforcement. Second, many countries have developed regulatory frameworks focused on investor protection, promoting transparency and legal clarity to foster crowdfunding growth. These frameworks often balance investor safeguards with market flexibility. Third, to address these shortcomings, the study proposes a co-regulation model for equity crowdfunding in Indonesia. This model emphasizes collaboration between government and private stakeholders to create adaptive, transparent regulations that enhance legal certainty. By strengthening regulatory substance and enforcement, this design aims to mitigate risks, ensure investor protection, and support the sustainable development of equity crowdfunding, aligning with the needs of Indonesia’s digital economy and MSME sector.