Billionaire investor Mark Cuban has asked the U.S. Securities and Exchange Commission (SEC) to amend Form S-1 to make it easier for token-based companies to register with regulators.
Cuban's proposal follows a footnote in which SEC Commissioner Mark Ueda described the agency's current approach to cryptocurrency disclosure documents as “problematic.”
Form S-1
Form S-1 is a registration statement that the SEC requires domestic issuers to file to offer new securities to the public. The form contains important information about the company, including business operations, risk factors, and other important details about its product offerings. Any company that intends to trade its securities shares on a national exchange, such as the New York Stock Exchange, must file this form.
Ueda noted that most cryptocurrency issuers have unique characteristics that may not fit the information currently required in the S-1.
“Many of these issuers and crypto digital assets have characteristics that mean that their S-1 forms may require information that is not technically relevant or applicable, but does not require certain information that may be material.”
Ueda further noted that the European Commission's current approach “neither promotes capital formation nor protects investors.”
Ueda therefore suggested that the SEC allow a distinction in Form S-1 filings for crypto digital assets, similar to those for funds, insurance products, and other securities. Ueda believes that this approach would provide more relevant and important information for crypto assets and their issuers.
Ueda added:
“[Such an approach may have] and ancillary investor protections and remedies under the securities laws.”
The crypto community agrees
In a social media post on July 2, Cuban supported Ueda's views, saying:
“The problem isn’t that crypto companies don’t want to register. The problem is that it’s like trying to force a square peg into a round hole. It doesn’t fit. That’s why there isn’t a single token-based company registered and operating.”
Similarly, the US Blockchain Association praised Ueda's comments as the thoughtful approach the industry needs.
“This is exactly what the industry needs: thoughtful involvement from the SEC to ensure innovation can thrive while consumers are protected.”
