Registration with SEC: A Lengthy and Costly Process for Encryption Companies

03/03/2023 08:59 • Metaverse Matters • 127 views

On March 3, Fox Business News reporter Eleanor Terrett said on Twitter that today he talked with the encryption trading platform INX about their registration procedures with the United States Securities and Exchange Commission (SEC) (they used the F-1 prospectus for IPO). They told me that the whole process from 2018 took 953 days and cost about US $2 million in legal fees. This is an example of the time and cost spent by encryption companies registering with the SEC. I also learned that at present, a few companies have “painstakingly” passed the Reg a registration process, and some companies have chosen to submit Reg D or Reg S registration. These registrations are not subject to the review of the United States Securities and Exchange Commission, but only allow companies to attract qualified investors, not the public.

Fox reporter: SEC registration costs a lot for encryption companies

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The process of registration with the United States Securities and Exchange Commission (SEC) can be an arduous task, especially for encryption companies. A recent tweet by Fox Business News reporter, Eleanor Terrett, highlights the lengthy and costly process that encryption companies undergo when registering with the SEC.

According to Terrett, she spoke with the encryption trading platform INX about their registration procedures with the SEC. The company used the F-1 prospectus for IPO, and the whole process took 953 days and cost approximately US $2 million in legal fees. This staggering amount of time and money invested in the registration process showcases how complicated the regulatory environment is for encryption companies.

Some companies have managed to pass the Reg A registration process, but that is also said to be “painstaking” and not a preferred option. Other companies have chosen to submit Reg D or Reg S registration, which do not require SEC review but limit them to attracting only qualified investors and not the public.

The prolonged and costly procedure of registration with the SEC could hold companies back from entering the market entirely. The SEC’s regulations are necessary to prevent fraudulent companies from entering the market, but it is becoming increasingly clear that it is not possible to have a one-size-fits-all solution for all companies, especially for fast-moving firms like encryption companies.

In conclusion, the registration process with the SEC is a stumbling block for cryptocurrency and encryption companies. Firms looking to enter the sector should budget enough resources for registration fees and legal support. While the SEC’s strict regulations are necessary, they must take into account how it affects startups and small businesses, which are increasingly essential in the tech ecosystem’s growth.

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Registration with SEC: A Lengthy and Costly Process for Encryption Companies

Fox reporter: SEC registration costs a lot for encryption companies

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