Footnote: SEC Commissioner Mark Uyeda Says Tailored Registration Statement Needed for Digital Assets

In commenting on a rule adopted this week pertaining to Registered Index-Linked Annuities and an amended registration form to accommodate these offerings, SEC Commissioner Mark Uyeda slipped in a note about his opinion as to how crypto or digital asset offerings may be managed going forward.

Commissioner Uyeda believes the current S-1 registration statement may need some adjustments to accommodate the nuances of digital asset offerings. The footnote states:

“While a similar approach has been taken to certain other securities products, that has not been done with respect to issuers using Form S-1 to register the offer and sale of crypto digital assets. Many of these issuers and crypto digital 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 may be material. This approach for crypto digital assets is problematic because it neither facilitates capital formation nor protects investors. Consideration should be given to allowing variances from Form S-1 for crypto digital assets, similar to that given for fund and insurance products and other securities products. Such an approach may ultimately result registered offerings containing more tailored information that is relevant and material for crypto digital assets and their issuers and has the accompanying investor protection and remedies under the Securities Act.”

Commissioner Uyeda’s SEC peer, Commissioner Hester Peirce, called out the footnote and described it as a “great suggestion.”

For the moment, the SEC has taken a bit of a bipolar approach to regulating crypto by not providing bright line rules and then regulating by enforcement. At some point, this will change as regulations catch up to markets and perhaps a change in leadership at the Commission.

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