The SEC has introduced updated guidelines for companies that sell tokens to the public, aimed at ensuring compliance with disclosure requirements in the market. Issuers are required to provide comprehensive details regarding their business models, risk factors, and the attributes of the cryptocurrency assets. As regulatory scrutiny of the digital asset market increases, the U.S. Securities and Exchange Commission (SEC) has issued fresh advice on the disclosures that companies involved with crypto assets should present to their investors. The action is taken by the Division of Corporation Finance to provide corporations with guidance regarding token offerings that could qualify as securities under federal laws. While this guidance does not classify all cryptocurrencies as securities, it serves as a helpful reference for companies involved in this sector when dealing with the SEC. The Commission promotes comprehensive and precise documentation of business operations, risks, and financial accounts. This announcement follows the selection of Paul Atkins as the new Chair of the SEC, which the market sees as a move towards addressing regulatory deficiencies within the cryptocurrency sector. Issuers are required to reveal important information regarding their business strategies and associated risks. According to the new regulations, there is a necessity to provide ample details about the processes involved in the issuance of cryptocurrency assets. This encompasses aspects such as the methods of generating revenue, key developments in the network’s history, protocols for transaction validation, and the framework for governance. The SEC highlights that issuers need to disclose all relevant information concerning the crypto-asset, including its value and functions. This encompasses the dangers linked to liquidity, fluctuations in the market, supply issues, and technology risks relevant to the sector. Additionally, the SEC anticipates that issuers will supply detailed information regarding the technical characteristics of the security.
The US SEC has introduced new regulations for the disclosure of crypto securities in response to developments within the industry.
