SEC Issues Final Warning to Crypto Companies
November 23, 2018 12:14 pm
Preston Byrne, the founder of Monax and Attorney at ASI recently talked about the SEC excluding the United States from the rapidly growing ICO market. He talked about the risks that companies face when failing to register with the SEC when conducting an ICO in the US.
In case of exemption from, the SEC states that under regulation D, a private placement deal must be put in place Simple Agreement for Future Tokens (SAFT). Another way of getting exempted is regulation S in which the issuer of the ICO is based overseas and they do not have any touch points.
“So your options really are: find one of those exemptions which applies and get a lawyer who will give you a very conservative opinion about that or go directly to the SEC and ensure that your token is registered and that you’re making the appropriate disclosures on a quarterly basis.”
“In the alternative, there are options such as rescission, which is basically making your investors whole again winding up the whole scheme and calling it a day you could restructure the deal and try to get it offshore. If you haven’t issued tokens yet or you could take in your heels and fight.”
Byrne further said that it would be unwise for startups to fight against the SEC. Bigger companies can still explore these options and talk to the SEC.
“But for most companies the solution is really going to be to go to the SEC and what has happened here is they’ve really given a last opportunity, a last warning to the crypto space, look there’s an option to get out with some reasonable fines you know a reasonable way to compliance but you have to come to us and you have to volunteer.”