Exodus, a crypto wallet company, is experiencing a setback in its plan to list on the New York Stock Exchange American (NYSE). This delay is due to the United States Securities and Exchange Commission (SEC) reviewing the company’s registration statement, which became effective on April 28.
Previously, the NYSE American had approved the listing of Exodus’ Class A common stock, which was expected to start trading on May 9. However, the transition from the OTCQX market to the NYSE American will be put on hold until the SEC completes its regulatory compliance process.
This delay carries significant implications for Exodus, as it affects the company’s visibility and potential growth in the financial market. It highlights the challenges that crypto companies face when trying to venture into the traditional finance (TradFi) regulated space.
JP Richardson, the CEO of Exodus, expressed surprise and confusion at the delay. He mentioned that employees and their families had gathered in New York City to celebrate the listing, only to be disappointed by this last-minute change. Richardson said, “Every step of the way we’ve played by the regulatory rules given, and then at the 11th hour, the rules of the game were changed. It’s beyond frustrating.”
Exodus stated that they would reconsider relisting after the SEC review, depending on the outcome. They assured stockholders that no action is required at this time.
Lark Davis, an entrepreneur and crypto personality, commented on the situation, suggesting that the SEC may be preparing to take legal action against Exodus.
While Davis’ comment may be satirical, it sheds light on the concerns within the crypto community. These concerns have been heightened by the recent U.S. House of Representatives vote to nullify the SEC’s anti-crypto banking guidance, known as SAB 121.
The bipartisan bill, H.J.Res.109, was introduced by Republican Party Representative Mike Flood and passed on May 8 with 228 votes in favor and 182 against. Flood argued that SAB 121 unfairly restricts banks seeking to offer crypto custody services, as custodial assets are always considered “off-balance sheet.”
These legislative efforts reflect the growing tension between financial institutions and regulatory entities as the crypto market strives to enter the traditional finance sector.