Major companies that issue securities should provide information on their exposure to cryptocurrencies and related risks, a letter by the US Securities and Exchange Commission (SEC) said. This information should be reflected in the public filings of these companies.
The US regulator stated that companies should disclose the amount of cryptocurrency holdings and their risk exposure. “In meeting their disclosure obligations, companies should consider the need to address crypto asset market developments in their filings generally, including in their business descriptions, risk factors, and management’s discussion and analysis,” the SEC’s letter said. It highlighted the need for clear disclosure about the material impacts of crypto market developments.
The Securities and Exchange Commission noted the negative impact of the collapse of crypto exchanges and digital assets on the crypto market. According to the SEC, it posed a risk to counterparties and other market participants, as well as threatened the liquidity of other companies. The regulator also focused on the legal implications of such influence on the digital asset market.
After the collapse of FTX, several governments criticized the SEC for insufficiently monitoring companies working with crypto assets and demanded full information from them. SEC chairman Gary Gensler said that the Commission was ready to take decisive action to acquire information from companies and warned that the SEC would take measures against firms that fail to comply with regulatory demands.
