In a notable and important step towards regulating the digital asset industry, the U.S. Securities and Exchange Commission (SEC) through its Division of Corporation Finance, issued a clarifying statement titled:
"Offering and registration of securities in crypto asset markets", on the evening of Thursday.
This statement comes in the context of the agency's efforts to provide more clarity regarding the application of federal securities laws to the cryptocurrency market, at a time when this industry is expanding at an unprecedented rate. Last year saw a notable increase in the use of traditional financial instruments such as convertible bonds to raise funds for purchasing Bitcoin and adding it to institutional treasuries, similar to what MicroStrategy did previously. Additionally, requests for launching cryptocurrency exchange-traded funds (ETFs) surged significantly following the resounding success of spot Bitcoin funds.
The statement clarifies what companies need to disclose when offering securities, whether traditional or digital, such as tokenized real-world assets (RWAs). These requirements include:
✦ Description of the business activity
✦ Risk factors
✦ A detailed explanation of the nature of the offered securities
✦ An executive list of the names of directors and officers
✦ Audited financial statements and reports
Commissioner Hester Peirce confirmed via platform X, stating:
"We are not saying that your digital assets are considered securities... but if they are — and we are working to clarify this — or if your company operates in the crypto space, here are the required disclosure guidelines."
❖ This step represents a significant advancement in market regulation and provides players in this field with a clearer legal roadmap towards compliance and trust.