The corporate finance section of the Securities and Exchange Commission reminded firms of the disclosure obligations and gave direction to what more they want to know.
Publicly traded corporations may be required to disclose their exposure to crypto assets as a result of recent recommendations given by the United States Securities and Exchange Commission (SEC).
The recent turmoil in the market for crypto assets has “caused widespread disruption,” according to a statement issued by the Securities and Exchange Commission’s (SEC) Division of Corporation Finance on December 8. The statement also mentioned that companies may have disclosure obligations under federal securities laws to disclose whether or not these events could have an effect on their company’s operations.
The Securities and Exchange Commission (SEC) has also provided an example letter that would be sent to companies in order to request additional disclosures regarding the company’s exposure to cryptocurrency bankruptcies, cryptocurrency asset volatility, and any other significant developments in the cryptocurrency market.
The first question asks the company to provide disclosure of any “significant crypto asset market developments” that could impact the company’s financial condition, results, or share price, including the impact of the price volatility of crypto assets. The second question asks the company to provide disclosure of any “significant crypto asset market developments” that could impact the company’s financial condition, results, or share price.
The Securities and Exchange Commission (SEC) indicated that it in the following language “reviews filings on a more selective basis in order to monitor and improve compliance with the relevant disclosure obligations.
“It was pointed out that corporations are already compelled to give extra information as necessary to prevent investors from being misled.
The agency went on to say that in order for businesses to fulfill their disclosure responsibilities, they should assess whether or not it is necessary to address changes in the crypto asset market in their filings.
Over the last several months, the Securities and Exchange Commission (SEC) has been ramping up its preparations for more crypto monitoring. To that end, the SEC has opened two new offices: the Office of Crypto Assets and the Office of Industrial Applications and Services.
Recently, the Securities and Exchange Commission (SEC) and other agencies have been under criticism for being accused of lax enforcement in high-profile instances.