Last month, the United States Securities and Exchanges Commission (SEC) issued one of the first no-action letters for a crypto-related project that planned to conduct a public token offering.
Jonathan Ingram, the chief legal advisor of the SEC’s FinHub Division, announced the decision then, revealing reasons why the SEC would not pursue an enforcement action against Pocketful of Quarters, a crypto gaming startup that wanted to sell 'Quarters' tokens.
However, while the approval process may look easy from the surface, Lewis Cohen, the attorney that helped Pocketful of Quarters secure the requisite regulatory approval has recently revealed the lengthy process that they had to go through.
“The whole process wound up taking about a year,” the attorney said in a recent interview with CrowdFundInsider, adding that the partial U.S government shutdown last winter further delayed the process.
Attorney Cohen also spoke extensively regarding the model which Pocketful of Quarters twelve-year-old co-founder, George and his dad Mike Weiksner will use to raise funds by selling security tokens.
He explained that “the investment capital came from both traditional equities as well as a “security token” that entitles holders to 15% of the revenues from the sales of the “Quarters” gaming token.”
Moving forward, the attorney discussed the reason behind the supposed slow growth of the U.S crypto ecosystem revealing, it would take some time for the industry to take off because of the damages done by fake ICOs that overtook the space in 2017.
The [crypto] community, according to Cohen, needs to take ownership of the fact that a lot of damage was done during the “ICO boom” of 2017-18. “It will take time to rebuild trust with regulators – and not just the SEC, this includes the CFTC, FinCen and of course state-level regulators as well,” he predicted.