SEC requires public companies to disclose crypto-market–related risks and losses to investors

In the new guidance SEC has required public companies to disclose to investors information about risks to their business or losses caused by turbulence in the cryptocurrency market.

The agency said the move was prompted by concerns about recent bankruptcies within the industry.

“Under federal securities laws, companies may have obligations to disclose information regarding the direct or indirect impact that these and related events have had or may have on their business,” the document states.

They are asked to indicate whether they faced any risks to their business as a result of the suspension of redemptions or withdrawals of crypto assets.

The SEC noted that the questions sent in the letters are not exhaustive, and that companies should assess their own risks and concerns themselves.

Back in November, the SEC, along with other regulators, began to study the links between the collapsed FTX and its U.S. subsidiary and Alameda Research.

The collapse of the cryptocurrency exchange also led to losses for third-party companies that had dealings with FTX. Some of them fully or partially suspended operations.

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