SEC Tells Firms to Update Crypto Disclosures

The US Securities and Exchange Commission (SEC) is sending a letter to public companies requesting them to take a serious look at their disclosure obligations. Specifically, the SEC wants firms in the crypto ecosystem to tell their clientele how recent crypto casualties may have affected their business.

The SEC says businesses should publicize any dealings they may have had with now-bankrupt crypto firms. Additional disclosures could include firms telling their clients if they cannot locate any of the crypto assets under their control.

SEC Chair Gary Gensler this week revealed that there were already securities laws in place that governed disclosures. Gensler added the SEC had taken 100 enforcement actions against crypto firms in recent times, formally compelling them to abide by SEC guidelines or face sanction.

The SEC continues to encourage companies to publicize important information, such as a company’s share price, customer demand, debt financing or legal proceedings. These obligations are already in place but are often ignored.

The SEC's letter comes after high-profile crypto exchange FTX filed for bankruptcy last month, shaking the whole crypto market and even catching the attention of senior lawmakers. Over the same period, crypto lender BlockFi has also declared bankruptcy, while other firms, like Genesis Trading, have paused trading.

The SEC’s actions come as regulators point fingers among themselves over the perceived oversight failures that led to FTX’s demise.