SEC Issues New Guidance For US Companies To Disclose Crypto Exposure
SEC Issues New Guidance For US Companies To Disclose Crypto Exposure.
Following the massive crash of crypto exchange FTX as well as the current crypto winter that has left most crypto tokens at a low price this past year, The Securities and Exchange Commission has issued a new warning towards many US companies.
Disclosing Crypto Exposure
On Thursday, The United States Securities and Exchange Commission (SEC) issued a new guidance to U.S. public companies requiring firms to disclose to investors their exposure and risk to the cryptocurrency market.
👨🏻💻 SEC wants companies to publicly disclose if they have exposure to crypto.
— Satoshi Stacker (@StackerSatoshi) December 8, 2022
Related: Congressman Calls For Investigation On SEC Chair’s Involvement In FTX Collapse!
In their statement, the SEC’s Division of Corporation Finance explains that the recent happenings in the crypto market have caused “widespread disruption” and it’s because of this companies may have disclosure obligations for a number of things involving the crypto market.
First, companies will need to disclose if they have made any “significant crypto asset market developments.” Companies will also need to disclose whether any crypto company bankruptcies may have “impacted or may impact your business, financial condition, customers, and counterparties, either directly or indirectly.”
“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 Division of Corporation Finance wrote in their statement.
SEC Being Criticized
This new guidance comes after the SEC faced a number of criticisms from both the general public as well as congress officials themselves for their lack of action and responsibility for the collapse of crypto exchange FTX.
Just earlier this week Democratic congressman Ritchie Torres sent a letter calling for the investigation of the SEC and their chair Gary Gensler for their lack of effort and action which Torres argued was a big factor in so many investors losing their money in FTX.
“If the SEC had done the due diligence of thoroughly investigating the financials of FTX, there would have been a greater likelihood of exposing the crypto exchange for what it truly is: a house of cars built on monopoly money printed out of thin air.” Torres wrote.
Related: SBF Probed For Role In Terra Luna Collapse, Do Kwon Chimes In
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