The Securities and Exchange Commission (SEC) said Thursday that crypto companies that issue or trade tokens that could become securities should provide detailed disclosures.
The SEC has issued its latest staff statement on disclosure ahead of the second roundtable. This is “as part of an effort to make the application of federal securities laws more clear to crypto assets.”
Non-binding guidance recommends that companies submitting disclosures are accurate about what their business is doing and what role the tokens play in those ventures. Much of this is based on observations about what companies have previously disclosed, the statement said. The statement did not dig deep into which cryptocurrencies are defined as securities or what conclusive guidance on the issue would look like.
“These offers and registrations may include stocks or debt securities of the issuer that have operations related to networks, applications and/or crypto assets. These offers and registrations may be related to crypto assets provided as part of the investment agreement or as part of the crypto assets of the subject,” he said.
Many of the details include disclosures made by existing companies that the SEC said they observed include whether the company is encrypted or developing a blockchain network, development milestones, network objectives, or based on an open source or other technology stack.
Previous disclosures also include details such as rights and technical specifications held by token holders, the statement said.
The department is simply offering the opinion that ahead of the work of the SEC’s new cryptographic task force, it would more clearly define where its jurisdiction is in the digital asset sector, according to the statement. The footnote noted that, like previous staff statements, the statement was “incompetent or effective,” rather than formal guidance or rulemaking.
Previous staff statements issued under acting chairman Mark Ueda were addressed to stablecoins and memecoins.
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