SEC releases guidance for crypto asset disclosure by issuers
The United States Securities and Exchange Commission (SEC) has published new guidance on the application of disclosure requirements to crypto-asset securities issuances. This guidance specifically targets crypto asset exchange-traded products (Crypto Asset ETPs), which are structured as trusts holding crypto assets and qualify as securities issuers subject to the Securities Act of 1933 and the Securities Exchange Act of 1934.
According to the SEC Staff's July 1, 2025, Statement, Crypto Asset ETP issuers must comply with traditional disclosure rules under Regulation S-K and Regulation S-X as part of Securities Act registration.
Key specific disclosure requirements highlighted include the need to disclose the extent to which a business materially depends on third-party service providers, such as custodians, administrators, or market makers involved in managing or supporting the Crypto Asset ETP. Issuers must also provide financial statements and information about the crypto assets underlying the ETP in compliance with Regulation S-X requirements.
Risk factors unique to crypto assets or specific to the issuer’s structure and operations must be addressed within the context of the Exchange Act disclosure framework. Disclosures must be adapted to reflect the unique attributes of crypto assets and associated custody, valuation, and market risks.
The SEC's efforts to clarify crypto regulation and modernize disclosures for these emerging asset types also extend beyond Crypto Asset ETPs. SEC Chair Paul S. Atkins and ongoing initiatives like Project Crypto have directed SEC staff to address topics like initial coin offerings (ICOs), airdrops, network rewards, custody, and trading. This includes adapting existing custody rules and creating a clearer regulatory framework around whether digital assets qualify as securities.
The SEC's evolving approach to cryptocurrency regulation includes addressing topics like meme coins, crypto mining, stablecoins, and creating a crypto taskforce. The business description in any crypto project must be presented in clear, concise, and understandable language, without overly relying on technical terminology or jargon.
It's important to note that the SEC under Acting Chair Uyeda has taken the first action to rescind SAB 121, which prevented banks from providing digital asset custody. However, the SEC has withdrawn from several legal cases related to cryptocurrency, acknowledging that this is an interim step while the SEC Crypto Task Force works on comprehensive guidance.
Crypto firms may need to obtain more investor data at issuance, which could pose challenges during the early stages of secondary market trading. The latest guidance from the SEC is a layman's guide of what is expected in an S-1 filing, which is made for a securities issuance.
In summary, the latest SEC Staff guidance requires crypto-asset securities issuers—particularly Crypto Asset ETP issuers—to follow existing securities disclosure frameworks with specific emphasis on disclosure of third-party dependencies, detailed financial and asset information, and tailored risk factors relating to crypto assets. This guidance forms part of a broader SEC effort to clarify crypto regulation while modernizing disclosures for these emerging asset types.
[1] SEC Staff Statement on Crypto-Asset ETPs Under the Securities Act of 1933 and the Securities Exchange Act of 1934, July 1, 2025. [2] SEC Chair Paul S. Atkins Speech on Cryptocurrency Regulation, March 1, 2025. [3] SEC Press Release: SEC Announces Creation of Crypto Task Force, February 1, 2025. [4] Project Crypto: Modernizing Disclosures for Emerging Asset Types, SEC website. [5] SEC Guidance on Meme Coins, Crypto Mining, Stablecoins, and more, SEC website.
- The SEC Staff's statement published on July 1, 2025, indicates that Crypto Asset ETP issuers must adhere to traditional disclosure rules under Regulation S-K and Regulation S-X as part of Securities Act registration, which is a requirement for finance businesses dealing with securities.
- According to the SEC's guidance, issuers of Crypto Asset ETPs must disclose the extent to which their business depends on third-party service providers, such as custodians, administrators, or market makers involved in managing or supporting the ETPs.
- The SEC's ongoing initiatives, including Project Crypto and the creation of a Crypto Task Force, aim to address topics like initial coin offerings (ICOs), airdrops, network rewards, custody, and trading, providing legal insights into the regulation of technology-driven financial projects like stablecoins.
- In light of the SEC's evolving approach to cryptocurrency regulation, crypto firms may need to provide clear, concise, and understandable language when presenting their business descriptions in any crypto project, avoiding technical jargon where possible.
