When a company goes public, and raises funds, the sheer amount of paper work, filings, due process, and legal procedures is larger than any one person can truly fathom unless you’ve worked at a bank, on these deals and/or have heard the stories from roadshow to IPO.
One thing many modern investors wonder is: who made all these rules?
Modern security rules were made to keep everyday investors safe, to reduce scams, and to protect the general public from all sorts of clever things sharp talkers can do with the promise of “get rich quick” equity. Without this, it would be the wild west of public companies, lack of disclosure, tons of shenanigans.
Perhaps this one reason why crypto has become a rather loved asset – a certain group of people are just flat our exhausted by the red and yellow tape, the process it takes, to legally access markets.
Crypto, in a matter of years, has essentially leap frogged all of that. Why would you go through all the due process when you can launch a crypto and skip it all?
Both Bitcoin and Ethereum have never once made a public filing, disclosure, road show or anything like this. We don’t even know who the largest holders really are – there are no 13F filings. And yet, they now have ETFs that they can sell into. They’ve accessed modern markets without doing any of the typical legal song and dance that most other companies need to do.
And thus, this is the SEC’s big dilemma. Actually, it’s an issue that involves everyone in capital markets. The thing is this: by allowing such ETFs for cryptocurrencies that never followed the normal process, the long and expensive yellow brick road of Wall Street, they are essentially ending the old ways of doing things and opening markets wide open.
I don’t know what the answer is here, what’s right and what’s wrong, but this is just the situation right now.
It has me thinking about what’s to come…