The statement was published by the Commission’s Division of Corporate Finance which provides investors with “the information they need to make informed investment and voting decisions.”
Crypto Industry Gets Clarity on Security Compliance
The U.S. Securities and Exchange Commission (SEC) via its Division of Corporate Finance, published a statement on “Offerings and Registrations of Securities in the Crypto Asset Markets” on Thursday evening, in what it says is “part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets.”
The past year has seen an uptick in companies using traditional financial instruments such as convertible bonds to raise money to purchase bitcoin (BTC) for their treasuries al a Strategy (formerly Microstrategy). There’s also been a surge in crypto exchange-traded fund (ETF) applications ever since the wild success of the first cohort of spot bitcoin ETFs last January. Stablecoins have gone mainstream, with bipartisan-supported legislation currently working its way through Congress. And crypto companies such as Circle have filed for initial public offerings (IPOs).
Given that backdrop, it should come as no surprise that the Division has decided to offer its perspective on what such crypto companies must disclose when offering securities. Whether the securities are traditional assets, such as debt instruments, or crypto assets, like tokenized real-world assets (RWAs), the Division outlines requirements such as a description of the business, risk factors, a description of the securities, a list of the company’s executives, and relevant financial statements and exhibits.
“We’re not saying your crypto assets are securities,” said SEC Commissioner Hester Peirce in a post on X. “But if they are (and we’re working on clarifying that) or your company is involved in the crypto industry, here’s some disclosure guidance.”