The U.S. Securities and Exchange Commission (SEC) has issued new staff guidance to clarify how federal securities laws may apply to crypto assets, urging crypto firms to improve the quality and depth of their disclosures.
The statement, released by the SEC’s Division of Corporation Finance, outlines how companies dealing with digital tokens—especially those that might qualify as securities—should present more detailed and transparent information about their business operations, technology, and associated risks.
Although the guidance carries no legal force, it stems from the Division’s ongoing observations and engagement with crypto-related filings. It addresses questions repeatedly raised by market participants and aims to shed light on what regulators expect to see in disclosures under existing securities laws.
According to the Division, crypto companies are expected to share comprehensive insights into their operations—detailing the functions of their tokens, revenue models, and the roles they plan to play in any crypto network or decentralized application they launch. The statement also recommends that companies disclose whether they intend to remain actively involved in a project post-launch or if another party will assume responsibility.
The SEC has advised firms to clarify various aspects of their blockchain mechanisms, such as proof-of-work and proof-of-stake, block size, transaction throughput, and security measures. While not all crypto offerings need registration, those considered securities must adhere to guidelines. Issuers should disclose risk factors like price volatility and cybersecurity issues, along with a detailed description of the financial instrument, profit-sharing mechanisms, and voting rights. Additionally, disclosures should include information about smart contract audits, token supply, issuance models, and key personnel.
This latest move builds on the SEC’s broader initiative to engage with the crypto sector. The agency’s Crypto Task Force is set to host a series of roundtables with industry players to refine oversight strategies around trading, custody, tokenization, and decentralized finance (DeFi).
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