Regulatory body, SEC, issues guidance on cryptocurrency disclosure for issuing entities
US Securities and Exchange Commission (SEC) Clarifies Disclosure Requirements for Crypto-Asset Securities
In a significant move, the United States Securities and Exchange Commission (SEC) has published guidance on the application of disclosure requirements to crypto-asset securities issuances. This guidance, primarily under the leadership of Acting Chair Uyeda, is a part of the SEC's evolving approach to cryptocurrency regulation.
The new guidance provides a layman's guide of what is expected in an S-1 filing, particularly impacting crypto projects. Securities laws require a record of ownership, and the issuer has to disclose where that record is held. Moreover, officers, including those with policy-making functions, have to be identified.
The SEC is developing clear guidelines to determine when a digital asset is a security under the Howey test or other relevant legal standards. When it is deemed a security, issuers will have to comply with these tailored disclosure requirements.
The guidance also includes proposals for exemptions and safe harbor provisions in the context of crypto asset issuances. This aims to facilitate certain token distributions (like airdrops) and network rewards without triggering the full registration requirements.
In the realm of custody and intermediary regulations, the SEC is revising rules to accommodate crypto assets, ensuring disclosures around asset custody and trading are transparent and protective of investors. The focus is on moving securities markets on-chain, and disclosures must encompass blockchain-related operational aspects.
However, it's important to note that the SEC acknowledges that most crypto assets are not securities, so the disclosure requirements are specific to those assets that meet the securities definition. The business description in an S-1 filing must be presented in clear, concise, and understandable language, without overly relying on technical terminology or jargon.
At the point of issuance, issuers at least know the wallet addresses of token holders. However, beyond the early stages, cryptocurrency issuers often don't know the identities of token holders.
This guidance is an interim step while the SEC Crypto Task Force works on comprehensive guidance. It's worth mentioning that the SEC has withdrawn from various legal cases related to cryptocurrency and has rescinded SAB 121, preventing banks from providing digital asset custody.
In summary, the specific disclosure requirements for crypto-asset securities issuances according to the latest SEC guidance involve newly proposed, crypto-specific, and simplified disclosures, exemptions, and safe harbors, developed under Project Crypto. The exact disclosure templates and rules are still under development and subject to public comment as of August 2025.
[1] SEC Press Release, "SEC Adopts New Disclosure Requirements for Crypto-Asset Securities Issuers" (2023). [2] SEC Division of Corporation Finance, "Clarifications on Liquid Staking Receipts" (2024). [3] SEC Crypto Task Force, "Project Crypto: A Roadmap for Regulating Crypto-Asset Securities" (2022). [4] SEC Office of the Chief Accountant, "Crypto-Asset Securities: A Guide for Accountants" (2022).
- The guidance from the SEC provides insights into how regulations will affect news about crypto-asset securities projects in the finance and business sectors, particularly surrounding legal matters such as disclosure requirements and custody.
- The SEC is actively working to develop clear news on whether a digital asset is considered a security based on the Howey test or other legal standards, with implications for projects that fall under this category.
- The new regulations aim to provide a stable environment for crypto asset issuances, offering proposals for exemptions and safe harbor provisions that will facilitate certain token distributions and network rewards.
- The technology industry will also be impacted by these regulations, as the SEC is revising rules to ensure transparency in asset custody, trading, and blockchain-related operational aspects for crypto assets.
