SEC Gives Guidance on How Federal Securities Laws Could Apply to Crypto 

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The US Securities and Exchange Commission (SEC) staff have provided guidance on the potential application of federal securities laws to cryptocurrencies, advising companies dealing with tokens that might qualify as securities to offer clearer business details.

On April 10, the SEC’s Division of Corporation Finance issued a statement to clarify the application of federal securities laws to crypto assets. The Division’s statement was based on observations from existing disclosure requirements and addressed specific questions raised by market participants.

The guidance, which has no legal force or effect, suggested that crypto companies typically disclose comprehensive information about their operations. This includes details on company activities, how issued tokens function, and how the business plans to generate revenue.

Companies have also shared whether they will continue to participate in a crypto network or app post-launch and, if not, whether other entities will assume control.