Overview
On April 10, 2025, the SEC’s Division of Corporation Finance released a Staff Statement offering interpretive guidance on how federal securities law disclosure requirements apply to offerings and registrations involving crypto asset securities. The statement is intended to provide greater clarity pending broader regulatory action from the Commission’s Crypto Task Force, established by Acting Chairman Mark Uyeda.
The guidance primarily focuses on disclosures required under the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuers involved in crypto-related businesses or whose securities relate to a crypto asset investment contract (referred to as a “subject crypto asset”).
Key Takeaways
Tailored Disclosure Required
Issuers must provide clear, concise, and tailored disclosures specific to their business operations and developmental stage.
Boilerplate or generic references to blockchain technology or decentralized networks, absent material relevance, are discouraged.
Consistency Across Communications
Disclosures must align with public statements and promotional materials, including white papers and developer documentation.
Staff flagged inconsistencies between offering documents and external marketing as a compliance concern.
Business and Operations
Issuers must describe the current and proposed business model, including whether they will continue to operate the network or application post-launch.
Material dependencies on third parties (e.g., for protocol governance or smart contract functionality) should be disclosed.
Material Risks
Risk factors should address technical, regulatory, market, and operational risks unique to the crypto asset market.
Examples include volatility, regulatory uncertainty, cybersecurity, custody of digital assets, and protocol forks.
Use of Proceeds and Tokenomics
The use of offering proceeds, particularly when tied to the development or maintenance of a crypto network or platform, must be clearly disclosed.
Issuers should discuss any planned issuance, distribution, or management of subject crypto assets, including burn or lock-up mechanisms.
Management and Governance
Disclosure regarding management experience with digital assets and the governance of the crypto protocol is expected.
If DAO (Decentralized Autonomous Organization) structures are involved, the issuer should explain how decision-making and oversight are exercised.
Form-Specific Observations
The guidance addresses disclosures under Form S-1, Form 10, Form 20-F (for foreign private issuers), and Form 1-A (for Regulation A offerings).
Scaled disclosure accommodations may apply, but only where available and appropriate under the rules.
Practical Implications for Issuers and Advisers
Issuers contemplating a registered or exempt offering involving crypto assets must carefully assess their disclosure obligations in light of this guidance. Counsel should:
Evaluate current white papers, websites, and marketing communications for consistency with offering materials.
Prepare risk disclosures that reflect the evolving regulatory landscape and unique features of the crypto asset involved.
Ensure that offering materials describe in detail any involvement with a crypto asset that could be part of an “investment contract.”
The Staff’s observations signal continued scrutiny of crypto asset securities offerings and a heightened expectation of issuer transparency. Market participants should anticipate follow-on rulemaking or enforcement activity aligned with this framework.