The Securities and Exchange Commission (SEC) is stepping up its engagement with the crypto industry in unprecedented ways. On April 10, 2025, the SEC’s Division of Corporation Finance released a comprehensive statement offering clear guidance on disclosure requirements for crypto asset offerings and registrations under federal securities laws. This move signals a more collaborative and transparent approach, aiming to help issuers navigate the regulatory landscape while fostering innovation. 

Understanding the SEC’s New Guidance for Crypto Issuers 

The SEC staff’s guidance comes amid increasing scrutiny and evolving regulatory frameworks for crypto assets—tokens, coins, and other digital financial instruments issued via blockchain technology. Unlike traditional securities, crypto assets operate in a dynamic ecosystem with unique risks and operational models, and the SEC recognizes this complexity in its new disclosure recommendations. 

1). Tailored Business Descriptions: Clarity over Tech Jargon

The SEC emphasizes the importance of clear, concise, and tailored business descriptions. Crypto issuers are encouraged to describe the material aspects of their current or proposed operations without overloading disclosures with technical jargon or irrelevant technological details. Key elements include: 

• The company’s current development stage and future plans. 

• Consistency with public statements and marketing materials. 

• Whether the business will continue after launching related networks or applications. 

• How revenue is generated or expected to increase. 

• The role and function of the offered crypto asset in the business or ecosystem. 

2). Comprehensive Risk Factor Disclosures

Given the volatility and novelty of crypto assets, risk factor disclosures must be thorough and nuanced. The SEC urges issuers to address: 

• Price volatility and liquidity concerns. 

• Valuation methodologies. 

• Technological and cybersecurity risks. 

• Regulatory uncertainty and legal risks tied to developing crypto regulations. 

3). Clear Description of Securities and Crypto Assets

Investors must understand exactly what the security or crypto asset represents. Disclosures should cover: 

• Rights, obligations, and preferences of holders. 

• Technical specifications of the issued crypto assets. 

• The supply metrics, including any caps or inflation mechanisms. 

This clarity helps reduce confusion and build investor confidence in crypto offerings. 

4). Enhanced Disclosure on Leadership and Key Personnel

The guidance extends beyond formal executive titles to include all individuals—whether employees or third parties—who influence decision-making. For example, staff recommends disclosure of: 

• Individuals performing policy-making functions without traditional executive roles. 

• Directors or executives of sponsoring entities like trusts for crypto ETFs. 

• Fees paid to those third parties managing critical functions. 

5). Financial Reporting and Accounting Support

Innovative and complex crypto-related transactions often require specialized accounting treatment. The SEC encourages issuers to: 

• Reach out to the Office of Chief Accountant for help on financial statement issues. 

• Consult SEC staff on novel or complicated accounting matters to ensure transparent, compliant reporting. 

6). Including Smart Contract Code as Exhibits

As many crypto assets rely on smart contracts embedded in blockchain code, the SEC recognizes the importance of including relevant code as exhibits in registration statements. Issuers are expected to: 

• Provide the source code for smart contracts or the crypto network/application. 

• Update these exhibits promptly to reflect any changes in code that affect rights or obligations. 

A New Chapter for Crypto Disclosure and Regulation 

The SEC staff’s disclosure guidance marks a significant step toward harmonizing traditional securities laws with the groundbreaking world of crypto assets. While a complete regulatory framework is still in development, this guidance reflects growing regulatory openness and offers a roadmap for crypto issuers to achieve better transparency and compliance. 

Commissioner Hester Peirce, head of the SEC’s Crypto Task Force, encapsulated this spirit: the SEC invites dialogue and collaboration to balance investor protection with fostering innovation. Crypto businesses and investors alike should view this as an encouraging sign that the regulatory environment is evolving—not just with enforcement, but with support and clarity. 

As the crypto landscape continues to mature, keeping abreast of SEC guidance will be crucial for all participants seeking to build trust through clear, responsible disclosure. 

Stay informed, stay compliant, and watch this space as crypto regulation unfolds in 2025 and beyond!