Billionaire investor Mark Cuban has urged the US Securities and Exchange Commission (SEC) to amend Form S-1 so that token-based companies can easily register with authorities.
Cuban’s suggestion follows SEC Commissioner Mark Uyeda’s footnote describing the agency’s current approach to filing crypto disclosures as “problematic.”
Form S-1
Form S-1 is the registration statement that the SEC requires domestic issuers to file to publicly offer new securities. The form contains essential company information such as business activities, risk factors and other important details about the product offering. Any company that wants to trade its securities shares on a national exchange such as the New York Stock Exchange must file the form.
Uyeda pointed out that most crypto issuers have unique characteristics that may not fit the information currently required in Form S-1.
“Many of these issuers and digital crypto assets have characteristics for which Form S-1 may technically require information that is not relevant or applicable, but does not require certain information that could be material.”
Uyeda further noted that the Commission’s current approach “does not facilitate capital formation nor protect investors.”
Uyeda therefore proposed that the SEC grant waivers for the Form S-1 filings of digital crypto assets, similar to those for funds, insurance products and other securities. Uyeda believes this approach could lead to offerings with more relevant material information for crypto and its issuers.
Uyeda added:
“[Such an approach may have] the associated investor protections and remedies under the Securities Act.”
The Crypto community agrees
In a July 2 social media post, Cuban supported Uyeda’s views, stating:
“The problem is not that crypto companies don’t want to register. The problem is that it’s like trying to put a square peg in a round hole. It does not fit. Therefore, there is not a single token-based company that is registered and active.”
Similarly, the US Blockchain Association praised Uyeda’s statement as the thoughtful engagement the industry needs. They said:
“This is exactly what the industry needs: thoughtful involvement from the SEC to ensure innovation thrives while consumers are protected.”