SEC Asks Firms to Disclose Exposure to Struggling Crypto Firms

[ad_1]

The Securities and Exchange Commission (SEC) is asking publicly traded companies to tell investors about their involvement in struggling cryptocurrency companies (via CNBC). In a notice released Thursday, the SEC says companies may have a duty under federal law to disclose whether their operations or finances have been affected by the turmoil rocking the crypto market.

The SEC division of Corporation Finance, the arm that ensures companies disclose necessary information to investors, issued the guidelines, which are meant to help companies prepare disclosure documents. It doesn’t officially introduce any new disclosure requirements, but the set of recommendations is a sign that regulators are watching crypto more closely.

As noted in the sample letter, the SEC says companies should consider whether they have had exposure to crypto companies that have filed for bankruptcy, suspended withdrawals, or experienced excessive withdrawals. It also asks companies to describe the steps they take to secure customers’ crypto assets, as well as whether the disruption in the crypto market has caused them any reputational damage.

The SEC has come under fire for its handling of crypto regulation, with Sen. Elizabeth Warren (D-MA) telling the agency to dress up after FTX’s implosion last month, adding that the SEC has taken a lot delay in law enforcement. on crypto fraud. On Wednesday, SEC Chairman Gary Gensler defended the agencies’ work in an interview with Yahoo Finance, saying the SEC is already equipped and has taken 100 enforcement actions against crypto firms.

[ad_2]