- SEC’s Division of Corporation Finance has released guidance on how securities laws apply to crypto asset markets.
- The guidance helps companies that are developing blockchains, registering investment contracts for ICOs, or issuing crypto assets that qualify as securities.
- Companies with questions about disclosure requirements can contact the Division directly or reach out to the Crypto Task Force.
The Securities and Exchange Commission’s Division of Corporation Finance issued new guidance today clarifying how federal securities laws apply to offerings and registrations of securities in the crypto asset markets. The statement focuses on disclosure requirements for issuers of securities whose operations relate to crypto networks, applications, or assets, without addressing whether specific crypto assets are securities.
Who Benefits from the New Guidance
The Division’s statement is designed to assist several types of companies, including those developing blockchains while issuing debt or equity, businesses registering investment contracts for initial coin offerings, and entities issuing crypto assets that themselves qualify as securities. Companies integrating non-fungible tokens into video games and issuing debt or equity may also find the guidance relevant.
"This guidance is a small step in identifying relevant disclosures so that investors have material information about the projects and businesses in which they are investing," notes the SEC statement. The Division emphasizes the importance of disclosures regarding development timelines of crypto networks, their functions and processes, and clear explanations of security holders’ rights.
Disclosure Requirements and Contact Information
The guidance acknowledges that tokens that are not securities can be sold in securities offerings, while also recognizing that centralized crypto companies might issue equity, debt securities, or crypto assets that qualify as securities. The statement represents an incremental step toward clarifying the SEC’s "come-in-and-register" approach that has confused many in the industry.
Companies seeking additional information about disclosure requirements can contact the Division through its website. The Crypto Task Force is also accepting inquiries and feedback at crypto@sec.gov.
The announcement credits Cicely LaMothe, Acting Director of the Division of Corporation Finance, and her staff for their work in providing clear statements about securities regulations applicable to crypto assets. According to the statement, the Crypto Task Force and other Commission staff are continuing their work to provide further guidance on when crypto asset issuers must register and what that registration would entail.
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