Regulatory turning point? SEC releases new guidance on crypto asset registration and reporting

The U.S. SEC released new guidance on April 10 clarifying how federal securities laws apply to crypto-related securities, covering registration, issuance, and reporting requirements.
The non-binding statement outlines expectations for companies to disclose business operations, token design, governance, technical specs, and financial reporting in filings like Form S-1, Form 10, and Form 1-A.
Key disclosures include revenue strategies, project milestones, token functionality (e.g., transactions, governance), consensus mechanisms, and risks like volatility or legal classification.
Companies must detail dependencies on third-party blockchains, smart contract code, token creation/supply mechanics, and ownership tracking tools.
Leadership and financial disclosures must follow accounting standards, with emphasis on transparency in promotional materials like whitepapers.
The guidance signals the SEC’s more open stance under new leadership, aiming to streamline compliance for crypto firms entering public markets.

On April 10, the U.S. Securities and Exchange Commission (SEC) Division of Finance released a new staff opinion outlining how federal securities laws apply to the registration and issuance of Crypto-related securities.

The statement covers a range of topics, including how the company should present information on its business operations, token design, governance, technical specifications, and financial reporting.

While the document does not establish new regulations, it reflects the SEC staff’s current expectations on how companies should prepare filings. It also shows that the SEC has taken a more open attitude towards Crypto regulation under the new leadership.

Providing clearer guidance to registrants

The guidance focuses on filings under the Securities Act of 1933 and the Securities Exchange Act of 1934 and is intended to assist platform entities involved in token offerings or building on blockchain infrastructure.

These filings may include registration forms such as Form S-1 for public offerings, Form 10 for reporting companies, Form 20-F for foreign issuers, and Form 1-A for Regulation A exemptions.

The company should clearly outline its revenue strategy, project milestones, and the technical framework behind any relevant digital assets. If the Crypto asset has a specific function in the business, such as supporting transactions, governance, or access services, this information must be described in plain language.

The SEC also expects these descriptions to be consistent with what is shared in promotional materials such as white papers and developer documentation.

If development is still ongoing, the statement recommends that the company outline key milestones, expected timelines, funding sources, and any role the token or network will play upon launch.

This includes an explanation of the consensus mechanism, transaction fees, and whether the network uses open source or proprietary software.

Disclosure requirements

The SEC also outlined expectations for disclosure of investment risks, including token volatility, liquidity limitations, legal classification, and security vulnerabilities.

For example, if the company’s business model relies on a third-party blockchain or other external network, those dependencies should be described. The same applies to any arrangements with market makers or custodians.

Issuers must disclose whether the tokens have voting rights, profit-sharing mechanisms or redemption procedures, and how those rights can be conveyed or modified. The document also requires details on how the tokens are created, whether the supply is fixed, and whether vesting or lock-up periods apply.

If a smart contract controls the behavior of the token, the code must be submitted as an attachment, and any updates to it should be reflected in future amendments. In addition, the company must describe how token ownership is tracked, the tools required to transfer assets, and any fees associated with these transfers.

Companies must also disclose information about leadership and key personnel, including individuals or entities that may play a central role in decision-making but do not hold a formal title. For trusts or exchange-traded products, disclosures should include information about the sponsor and its officers.

Financial disclosures must follow established accounting standards, and the SEC encourages companies facing new types of reporting situations to consult with their chief accounting office.

Although the staff guidance is non-binding, it provides a reference point for crypto-related entities during the registration process. It reflects the SEC’s growing focus on the crypto market as more companies seek to operate in the public markets and raise funds through blockchain-based products.