On April 10, 2025, the U.S. Securities and Exchange Commission (SEC) released new guidance aimed at clarifying how federal securities laws apply to cryptocurrencies, emphasizing the need for clearer disclosures from companies involved with tokens that may be considered securities.

The SEC's Division of Corporation Finance stated that this guidance is based on existing disclosure requirements and intends to enhance transparency and reporting for crypto-related securities.

This guidance is particularly relevant for companies launching tokens or operating on blockchain platforms, helping them comply with the Securities Act of 1933 and the Securities Exchange Act of 1934.

While the guidance indicates that registration is not required for crypto offerings that do not qualify as securities or investment contracts, it does not define which digital assets could be classified as securities.

The SEC emphasizes the importance of disclosures related to investment risks, including token volatility, liquidity limitations, and legal classifications.

Issuers are expected to disclose risks such as price volatility and cybersecurity vulnerabilities, along with a complete description of security features, including voting rights and profit-sharing mechanisms.

Companies must detail their dependencies on third-party blockchains and any arrangements with market makers or custodians that might affect token performance.

In preparing filings, companies must provide detailed descriptions of their business operations, token functionality, governance, technical specifications, and financial reporting.

Crypto companies are encouraged to disclose detailed information about their operations, including the functionality of their tokens and their revenue generation strategies.

Firms should clarify their ongoing involvement in any crypto networks or applications after launch and outline any succession plans for management.

The SEC plans to engage further with the crypto industry through a series of roundtables to discuss regulatory approaches to trading, custody, tokenization, and decentralized finance.

Legal expert Joe Carlasare welcomed the guidance as a positive step for regulatory clarity, suggesting it could enhance transparency and credibility among crypto entities.