US SEC urges detailed disclosure of cryptocurrency issuance, emphasizes compliance

The U.S. Securities and Exchange Commission (SEC) said Thursday that crypto companies that issue or deal in tokens that could be considered securities should provide detailed disclosures.

The SEC released its latest staff disclosure statement ahead of its second roundtable, which will focus on trading, "as part of an effort to provide greater clarity on the application of federal securities laws to the crypto-asset space." The non-binding guidance advises companies that submit disclosures to accurately describe what their business is and the role tokens may play in their business. The statement notes that many of the details are based on observations of companies' previous disclosures. The statement does not delve into which cryptocurrencies are defined as securities or what definitive guidance on the issue might look like.

"These offerings and registrations may involve equity or debt securities of the issuer that are related to networks, applications and/or crypto-assets. These offerings and registrations may also involve crypto-assets that are part of or subject to investment contracts (such crypto-assets are referred to as 'underlying crypto-assets')," the statement said.

Many of the details include information the SEC has observed disclosed by existing companies, such as whether they are developing crypto or blockchain networks, their development milestones, the purpose of the network and whether it is based on open source or other technology stacks. The statement noted that previous disclosures also included details such as token holder rights and technical specifications.