SEC wants companies to tell the public if they have exposure to crypto assets or do business with crypto-related companies.
The news comes after the collapse of FTX, which caused people to look at the SEC with more care.
It’s meant to show what kind of comments the SEC might send to public company issuers if/when necessary.
SEC puts out new rules for Reporting Digital Assets
The U.S. Securities and Exchange Commission SEC wants companies to tell the public if they have any exposure to crypto assets or do business with crypto-related companies.
The U.S. agency in charge of public company disclosures said the new rules are needed because of “recent bankruptcies and financial distress among crypto asset market participants,” which have happened this year. The most recent example of this is the high-profile collapse of FTX and its corporate family. “In order to meet their disclosure requirements, companies should think about whether they need to talk about changes in the crypto asset market in their filings in general, such as in their business descriptions, risk factors, and management’s discussion and analysis,” the agency says.
Firms must say if they have direct or indirect ties to companies that have gone bankrupt, had too many redemptions or withdrawals of crypto assets, keep customers’ crypto assets that aren’t accounted for, or had problems with corporate compliance.
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Businesses have to explain how the failures of other businesses have affected their own, and they have to say what steps they are taking to protect their customers’ crypto assets.
The news comes after the collapse of FTX, which caused people to worry about financial contagion in crypto markets and to look at the SEC with more care. The guidance will be posted on an SEC website, and a spokesperson for the agency told The Block that it is meant to show what kinds of comments the agency might send to public company issuers if/when necessary.