On 10 April 2025, the United States Securities and Exchange Commission (US SEC), through its Division of Corporation Finance, published a detailed interpretive statement titled Offerings and Registrations of Securities in the Crypto Asset Markets. The statement provides comprehensive staff views on the application of existing federal securities law disclosure requirements to offerings and registrations of securities within the crypto asset markets. This initiative forms part of the US SEC’s broader regulatory effort, led by Acting Chairman Mark T. Uyeda and the Crypto Task Force, to create a clear and consistent disclosure regime for market participants involved with crypto-related securities.
The statement serves as a non-binding interpretive document outlining the expectations and common issues the Division has observed in the review of United States Securities Act and Exchange Act filings. It aims to clarify applicable disclosure requirements for issuers engaged with crypto networks, decentralised applications, and crypto asset offerings, including tokens offered as part of or under an investment contract. While not a rule or regulation, the document is intended to assist registrants and their advisors in preparing compliant disclosures during the SEC’s ongoing deliberations to formulate a broader regulatory framework for crypto assets.
Definitions
For purposes of this statement, US SEC defines for the purpose of this statement as follows:
“crypto asset” is an asset that is generated, issued, and/or transferred using a blockchain or similar distributed ledger technology network (“crypto network”), including, but not limited to, assets known as “tokens,” “digital assets,” “virtual currencies,” and “coins,” and that relies on cryptographic protocols.”
A “network” refer to a crypto network, and references to “application” refer to an application running on such a crypto network.”
An “application” refers to a decentralised or blockchain-integrated programme. A “subject crypto asset” refers specifically to crypto assets offered under or as part of an investment contract.
An “onchain” transaction occurs directly on a network and is validated in accordance with the protocol of the network, with the transaction recorded on the network’s public ledger.
An “offchain” transaction occurs outside the network where the parties agree that a third party will validate and authenticate the transaction.
Background and Disclosure Observations
The guidance identifies recurring areas of concern and interpretive ambiguity relating to existing federal disclosure forms, including Form S-1, Form 10, Form 20-F (for foreign private issuers), and Form 1-A under Regulation A. It specifically addresses the treatment of disclosures in business descriptions, risk factors, rights of security holders, technical attributes of securities, and director/officer-related disclosures in the context of crypto-focused issuers.
In business descriptions, the Division recommends tailoring narrative disclosures to describe material aspects of a crypto issuer’s operations—such as network development status, governance, intended utility of the token, and related revenue models. For technical aspects, the issuer should disclose the network’s architecture, consensus mechanisms, licensing terms, security features, and transaction processing details, including gas fees and block size.
In terms of securities descriptions, issuers are expected to address features including voting rights, redemption terms, transaction mechanics, and custodial arrangements. Disclosure should also cover supply control mechanisms, minting protocols, and whether the issuer retains discretion over token economics.
Timeline and Legal Objective
This staff statement, issued on 10 April 2025, aligns with the US SEC’s ongoing initiative to enhance regulatory clarity in the crypto asset domain, especially following the establishment of the Crypto Task Force earlier this year on 21 January 2025. By formally codifying the Division’s observations and expectations, the US SEC aims to ensure that disclosures in crypto asset offerings meet the investor protection, market transparency, and capital formation objectives of the United States Securities Act of 1933 and the Securities Exchange Act of 1934.
In legal terms, the statement draws from foundational jurisprudence such as SEC v. W.J. Howey Co. and United Housing Foundation v. Forman, which establish the principles for assessing whether an instrument is a security and what constitutes sufficient economic disclosure. As emphasised, “form should be disregarded for substance,” and “the emphasis should be on economic realities underlying a transaction, and not on the name appended thereto” (421 U.S. 837, 849 [1975]).
Issuers and practitioners are encouraged to consult with the Division’s Office of Chief Counsel or the SEC’s Office of the Chief Accountant to address any uncertainties in application, especially for novel crypto instruments.
For more information or submission of interpretive requests, market participants can contact the Division via the official SEC portal.
(Source: https://www.sec.gov/newsroom/speeches-statements/cf-crypto-securities-041025)
