Time and Cost of Registering with the SEC: An Example from INX

03/03/2023 08:59 • AI Insights • 85 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

Analysis based on this information:

In a recent tweet, Fox Business News reporter Eleanor Terrett shared her conversation with INX about their registration procedures with the SEC. Using the F-1 prospectus for IPO, INX’s registration process since 2018 took 953 days and cost about $2 million in legal fees. This is an expensive and time-consuming ordeal for encryption companies.

The SEC is a regulatory body that is responsible for enforcing federal securities laws in the United States. For encryption companies, SEC registration is essential to obtain public funding and offer securities to investors legally. The registration process involves disclosure requirements and review by the SEC to ensure compliance with securities laws.

In INX’s case, it took nearly three years of preparation and financial resources to comply with the SEC’s requirements. This time and cost factor is likely to deter other companies from following the same path. In fact, some companies opt for Reg A registration, which is a less rigorous process, but only allows for the offering of securities to qualified investors, not the public.

The process of SEC registration is complex and requires a significant amount of legal expertise. Compliance with the agency’s regulations is a top priority for cryptocurrency businesses as failure to comply can lead to severe financial and legal repercussions. Entities must file for SEC registration before they can offer securities or receive funding from public sources.

In conclusion, Eleanor Terrett’s conversation with INX sheds light on the time and cost of SEC registration for encryption companies. For many businesses, the process may be daunting, and they may prefer to opt for Reg A, Reg D, or Reg S registrations to reduce regulatory burden. However, for those willing to make the investment, SEC registration can lead to access to public funds and increase trust among investors.

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Time and Cost of Registering with the SEC: An Example from INX

Fox reporter: SEC registration costs a lot for encryption companies

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