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HomeCrypto NewsMarketSEC "Come in and Register" Costs Companies $2M in Legal fees

SEC “Come in and Register” Costs Companies $2M in Legal fees


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SEC Registration Costs a Lot for Crypto Firms FOX Journalist Reveals.

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Through its Chair, Gary Gensler, the United States Securities and Exchange Commission (SEC) has often called on crypto firms to “come in and register.” However, the path to do this has remained opaque, as agreed by Hester Peirce, an SEC commissioner. Additionally, crypto firms have often lamented the SEC’s unwillingness to respond to inquiries.

However, FOX Business Journalist Eleanor Terrett has taken a significant step to demystify this process. No, it is not as simple as filling out forms on the SEC website.

In a Twitter thread yesterday, Terrett revealed that she sat down with INX, which claims to be the first SEC-registered crypto trading platform, to see how it achieved this. According to Terrett, the Canadian-based crypto firm disclosed that it filed the SEC’s F-1 form, which the agency requires of foreign entities issuing certain securities. Notably, the process, which started in 2018, took 953 days (about two and a half years) and cost $2 million in legal fees.

In addition, the journalist highlighted that other firms are exploring registration through the Regulation A form, which exempts a firm from registering a public offering. According to Terrett, others are going through the Regulation D or Regulation S registration process, which would restrict offerings to accredited investors.

Judging by these examples, the cost and the time required to register with the SEC create a significant barrier to entry into the crypto markets, feasible only for startups with deep pockets. Consequently, it could significantly discourage competition and encourage monopolies.

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As highlighted in a report today, Ripple General Counsel Stuart Alderoty has urged crypto startups to launch and build outside the U.S., citing the lack of regulatory clarity that makes compliance difficult.

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Okoya David
Okoya David
Okoya David Kio is a crypto enthusiast passionate about understanding what makes the nascent market tick. When he's not pondering about cryptocurrencies, you might find him in a BP debate room trying to proffer solutions to age-old societal problems.

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