An exterior view of the US Securities and Exchange Commission (SEC) headquarters in Washington.
Jonathan Ernst | Reuters
The Securities and Exchange Commission published new guidance on Thursday, requiring companies that issue securities to disclose to investors their exposure and risk in the cryptocurrency market.
The guidance comes about a month after FTX, one of the world's largest cryptocurrency exchanges, filed for bankruptcy after lending client funds to a venture trading firm founded by former FTX CEO Sam Bankman. -Fried. More than 100,000 customers were affected by the exchange failure.
On Wednesday, SEC Chairman Gary Gensler rejected the accusations that the agency has been unable to prevent crypto firms from misusing client funds. Gensler also said the SEC would take further enforcement action if companies fail to comply with existing rules.
Under the new guidance, companies will be required to include crypto asset holdings as well as their exposure to the risk of the FTX bankruptcy and other market developments in their public filings. of the company bankruptcy filings indicate that the company has more than 1 million creditors.
The SEC's Division of Corporate Finance developed a sample letter after a selective review of findings made under the Securities Act of 1933 and the Securities Exchange Act of 1934, which directs companies to disclose "material information additional, if any, that is necessary to make the required statements, in light of the circumstances under which they are made, not misleading," according to the guidance.
A suggested item within the letter asks the issuer to describe how the company's bankruptcies and subsequent effects "have affected or may affect your business, financial condition, customers and counterparties, either directly or indirectly." Another requests a description of "any material risk to you, whether direct or indirect, due to excessive redemptions or redemptions or a suspension of redemptions or redemptions of crypto assets. Please identify any material concentration of risk and quantify any material exposure."
The SEC's division of corporate finance encouraged companies to adopt these recommendations as they prepare documents "that may not ordinarily be subject to Division review prior to use."
