(800) 341-2684

Call Toll Free

Contact us

Online Inquiries 24/7

Laura Anthony Esq

MAKE VALUED ALLIANCES

Crypto Assets

Disclosures On Offerings And Registrations Of Securities In The Crypto Asset Markets

On April 10, 2025, the SEC Division of Corporation Finance (“CorpFin”) issued a statement on disclosurs in offerings and registrations of securities in the crypto asset markets.  This is the third statement issued by CorpFin on various topics dealing with cryptocurrencies and digital assets in a matter of weeks.  For a review of CorpFin’s statement on certain proof of work mining activities see HERE and on stablecoins, see HERE.

The statement is meant to give guidance related to specific disclosure topics when either registering crypto assets or when filing a registration statement for an issuer in the crypto asset business.  The guidance cuts across all Regulation S-K disclosures whether in a Securities Act form (S-1; F-1; etc..) or an Exchange Act form (10-K; 20-F etc..).

Description of Business – Item 101 of Regulation S-K

Item 101 of Regulation S-K – Description of Business – requires an issuer to provide detailed background information material to understanding the general development

SEC Statement On Stablecoins

On April 4, 2025, the SEC’s Division of Corporation Finance (“CorpFin”) issued a statement on stablecoins.  In Particular, the statement addresses stablecoins that are designed to maintain a stable value relative to the United States Dollar (“USD,”) on a one-for-one basis, can be redeemed for USD on a one-for-one basis (i.e., one stablecoin to one USD), and are backed by assets held in a reserve that are considered low-risk and readily liquid with a USD-value that meets or exceeds the redemption value of the stablecoins in circulation (“Covered Stablecoins”).

Stablecoins Generally

A stablecoin is a type of crypto asset designed to maintain a stable value relative to a reference asset, such as USD, another fiat currency, a commodity like gold, or a pool or basket of assets.  Stablecoins usually track with the underlying asset on a one-to-one basis (for example, one stablecoin for $1 USD).  Stablecoins can maintain their value in different ways, including through a set reserve

SEC Statement On Proof-Of-Work Mining Activities

On March 20, 2025, the SEC’s Division of Corporation Finance (“CorpFin”) issued a statement on certain proof-of-work mining activities.  Illustrating CorpFin’s evolving understanding of the digital world, the statement drills down to a very specific aspect of the crypto mining industry.

The CorpFin statement “addresses the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network.” In the statement, CorpFin refers to these mined crypto assets as “Covered Crypto Assets” and the mining as “Protocol Mining.”

Protocol Mining

Networks utilizing Protocol Mining are governed by computer code eliminating the need for designated trusted intermediaries.  The programmed software enforces certain network rules, technical requirements, and rewards distributions.  Public, permissionless networks allow anyone to participate in the network’s operation, including the validation

Categories

Contact Author

Laura Anthony Esq

Have a Question for Laura Anthony?