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The Costly and Lengthy Registration Process for Encryption Companies with the SEC

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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 p…

The Costly and Lengthy Registration Process for Encryption Companies with the SEC

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

Interpretation of the news:


Fox Business News reporter Eleanor Terrett recently took to Twitter to discuss her conversation with the encryption trading platform INX regarding their registration procedures with the United States Securities and Exchange Commission (SEC). According to Terrett, the entire process for INX to register with the SEC took 953 days and cost around US $2 million in legal fees. This is just one example of the time and cost spent by encryption companies trying to register with the SEC, which has become a major challenge for many businesses in the industry.

Terrett also discovered that only a few companies have managed to pass the Reg A registration process, which is an extensive and rigorous process that reviews the company’s business model, financial statements, and various other aspects. Some companies have decided to submit Reg D or Reg S registration, which do not require SEC review. However, these registrations limit the companies to attracting only qualified investors rather than the general public.

Overall, the high cost and lengthy process of SEC registration for encryption companies make it difficult for them to access public markets and raise capital. This can be detrimental to their growth and overall success, and has led many companies to seek alternative options such as crowdfunding or private fundraising.

The SEC’s cautious approach to encryption and cryptocurrency markets is understandable given the potential for fraud and the lack of regulation and oversight in the industry. However, the lengthy review process and high costs involved may hinder innovation and business growth.

In conclusion, the SEC registration process for encryption companies presents significant challenges and expenses that can deter businesses from entering public markets. While regulation and oversight are necessary to protect investors and ensure fair and transparent markets, it is important to strike a balance that supports innovation and business growth in this evolving industry.

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