Bitcoin (BTC) and Cryptocurrency Call from SEC to Companies!

Under new guidance from the U.S. Securities and Exchange Commission (SEC), cryptocurrency Public companies that have suffered the winter and the collapse of FTX or other digital asset companies may have to disclose these details to investors.

SEC Asks Companies To Disclose Their Exposure To Sinking Cryptocurrency Companies

Disclosures will likely apply to companies that directly incorporate digital assets into their businesses. But the guidance released Thursday suggests it could cover any company that has significant exposure to the troubled cryptocurrency market.

The SEC’s corporate finance division said:

“Recent bankruptcies and financial troubles among crypto-asset market participants have caused widespread disruption to these markets,” he wrote. Companies may have disclosure obligations under federal securities laws regarding the direct or indirect impact of these events and collateral events on their business.”

This guide is one of the first public steps the SEC has taken to address the uncertainty in the crypto market after the collapse of FTX, which filed for bankruptcy last month.

According to this guide, companies should consider the overall impact of developments in the crypto-asset market and examine whether they are exposed to counterparty risk. In addition, they must also consider the risks associated with a company’s liquidity and ability to find financing, as well as legal and regulatory issues, according to the guidance.

According to one of the sample comments in the guide, institution staff reviewing public companies’ disclosures will watch for details on how bankruptcies in the crypto industry and their knock-on effects may have affected firms.

“Clarify whether you have tangible assets that cannot be recovered or otherwise lost or misused due to bankruptcies,” the agency called.

*Not investment advice.