Turning Point? SEC Releases New Guidelines for Crypto Asset Registration and Reporting
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Turning Point? SEC Releases New Guidelines for Crypto Asset Registration and Reporting
The statement covers a range of topics, including how companies should present information about their business operations, token design, governance, technical specifications, and financial reporting.
Navigating Web3 tides with focused insightsAuthor: cryptoslate
Translation: Blockchain Knight
On April 10, the Division of Corporation Finance of the U.S. Securities and Exchange Commission (SEC) issued new staff guidance outlining how federal securities laws apply to the registration and issuance of crypto-related securities.
The statement covers a range of topics, including how companies should present information on their business operations, token design, governance, technical specifications, and financial reporting.
While the document does not establish new regulations, it reflects current expectations from SEC staff regarding how companies should prepare registration filings. It also signals a more open approach toward crypto regulation under the SEC’s new leadership.
Providing Clearer Guidance for Registrants
This guidance focuses on filings submitted under the Securities Act of 1933 and the Securities Exchange Act of 1934, aiming to assist entities involved in token offerings or platforms built on blockchain infrastructure.
Such filings may include registration forms such as Form S-1 for public offerings, Form 10 for reporting companies, Form 20-F for foreign issuers, and Form 1-A for Regulation A exemptions.
Companies should clearly outline their revenue strategies, project milestones, and the technological framework underlying any associated digital assets. If a crypto asset serves a specific function within the business—such as enabling transactions, governance, or access to services—that information must be described in plain language.
The SEC also expects these descriptions to align with content shared in promotional materials like whitepapers and developer documentation.
If development is ongoing, the guidance suggests that companies outline key milestones, expected timelines, sources of funding, and the intended role of the token or network after launch.
This includes explanations of the consensus mechanism, transaction fees, and whether the network uses open-source or proprietary software.
Disclosure Requirements
The SEC also listed expectations for investment risk disclosures, including token volatility, liquidity constraints, legal classification, and security vulnerabilities.
For example, if a company’s business model relies on third-party blockchains or other external networks, those dependencies should be disclosed. The same applies to any arrangements with market makers or custodians.
Issuers must disclose whether tokens carry voting rights, profit-sharing mechanisms, or redemption procedures, and how such rights are conveyed or modified. The document also requires detailed information on how tokens are created, whether supply is fixed, and whether vesting or lock-up periods apply.
If smart contracts govern token behavior, the code must be submitted as an exhibit, and any updates must be reflected in future amendments. Additionally, companies must describe how token ownership is tracked, what tools are required to transfer assets, and any fees associated with such transfers.
Companies must also disclose information about leadership and key personnel, including individuals or entities that may play a central role in decision-making even without formal titles. For trusts or exchange-traded products, disclosures should include information about sponsors and their managers.
Financial disclosures must follow established accounting standards, and the SEC encourages companies facing novel reporting issues to consult the Office of the Chief Accountant.
Although this staff guidance is not legally binding, it provides a reference point for crypto-related entities navigating the registration process. It reflects the SEC’s growing attention to the crypto market, as an increasing number of companies seek to operate in public markets and raise capital through blockchain-based products.
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