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Stablecoins

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

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