Traditional exchanges are holding off on Reg A+ initial public offerings (IPOs) following problematic offerings like that of purported cryptocurrency firm Longfin Corp., the Wall Street Journal (WSJ) reported on June 10.

Earlier in June, the United States Securities and Exchange Commission’s (SEC) filed fraud charges against Longfin. The SEC claimed that Longfin fabricated 90% of its revenue and sold over 400,000 shares of Longfin that it did not have the funds to back in a scheme to secure its spot on the Nasdaq.

The complaint also reportedly stated that the SEC granted Longfin’s Reg A+ offering based on the supposition that the company was principally managed and run in the U.S., when the company’s operations, assets and management were in fact all offshore.

Now, Nasdaq Inc. and the New York Stock Exchange (NYSE) are reportedly shying away from IPOs conducted by companies using Reg A+, a provision that allows firms to have lower accounting and disclosure standards than conventional offerings.

Moreover, Nasdaq has submitted a proposal to the SEC for a rule change that would preclude companies from listing on the exchange under Reg A+ unless they have been in business for no less than two years.

Speaking to WSJ, David Feldman, a partner with law firm Duane Morris LLP, said that a NYSE official told him earlier this year, that the exchange was not interested in new Reg A+ listings at the time.

A Nasdaq spokesman told WSJ that “we continuously examine our listing standards for all companies. We identified a need to enhance the rules in this area and align with our commitment to investor protection."

According to WSJ, between 2015 and 2018, companies raised around $1.5 billion in 157 offerings under Reg A+, while only a small part of those deals were carried on exchanges. In April of this year, decentralized computing network Blockstack applied with the SEC to launch a $50 million token sale under the Reg A+ framework. If approved, the offering would involve the sale of 295 million Stacks tokens.

That same month, the SEC published the “Framework for ‘Investment Contract’ Analysis of Digital Assets” which aims to help market participants ascertain whether or not a digital asset is deemed to be an investment contract, and therefore a security.