Fox reporter: SEC registration costs a lot for encryption companies

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.

Interpretation of this information:

The message provided gives insight into the time and cost required by companies in the encryption trading platform industry to register with the United States Securities and Exchange Commission (SEC). The message specifies that INX utilized the F-1 prospectus for the Initial Public Offering (IPO), and that the process took approximately 953 days, costing approximately $2 million in legal fees. This highlights the complexity and difficulty of the process, indicating the immense resources required for companies to meet regulatory requirements.

Furthermore, the message reveals that few companies have passed the Reg a registration process, and that some companies have chosen to submit Reg D or Reg S registration instead. These registrations attract qualified investors, but do not permit public offerings and are not subject to SEC review. This information suggests that companies in this sector face regulatory challenges, and that the requirements involved may hinder innovation.

In general, such regulations can result in reduced competition, fewer opportunities for innovation, and hinder investment. The barriers and costs of regulatory compliance affect startups and SMEs the most, often leading to slower growth and fewer opportunities, as seen in the case of INX.

In addition, the message highlights the need for streamlining the registration process, which could benefit companies and investors alike. The time and cost are especially high, making the process more bureaucratic than necessary, as well as exclusionary to smaller companies that may not have the resources to explore such regulatory processes.

To conclude, the message emphasizes the difficulty and cost of registering with the SEC for companies in the encryption trading platform industry. The high price and time taken to pass the registration process, paired with the corresponding regulatory obligations, creates a significant burden on companies. Therefore, there is a compelling need to streamline and optimize regulatory procedures to foster business growth and create sustainable opportunities.