Prominent Crypto Attorney Preston Byrne Says SEC has Issued Last Warning for Crypto Projects
ASI Attorney and Monax founder Preston Byrne recently discussed how the SEC has prevented the United States from participating in the ICO market. The discussion took place during an interview with CNBC Crypto Trader. Byrne also touched about the risks involved concerning entities registered in the United States, but not with the SEC before they decide to launch an ICO.
Bryne added that there is a misconception – most believe that the SEC has mandated that ICOs cannot be registered. However, the opposite is true, they must be registered. If registration is not necessary, then it is only due to an exemption that would apply. Of course, companies should check whether an exemption is applicable to them. A common exemption is the private placement exemption, which includes a Simple Agreement for Future Tokens under Regulation D. Another common exemption is regulation S, in which those who issue ICOs are abroad and do not have any business in the United States – thus they need not register.
He further stated, So your options really are: find one of these exemptions which applies and get a lawyer who will give you a very conservative option 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.”
Bryne also noted that there are a number of risks that ICOs face and that those risks were prominent in 2016 and 2017. One such risk is where they were registered in the United States, but not with the SEC. This leads to a compliance issue, but the good news is that it can be addressed by meeting with the SEC and trying to repair the issue.
According to Bryne, though, he does not advise that startups try to bypass or fight against the SEC. Very few are equipped legally and financially to handle such a battle. But, he continued, “But for most companies the solution is really going to be to go to the SEC and what has happened here is they’re 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.”