A Clearer Path Forward: SEC Disclosure Expectations for Token Issuers

The SEC’s Division of Corporation Finance issued a statement on April 10, 2025, clarifying the application of federal securities laws to crypto asset offerings and registrations. This guidance aims to assist token issuers in understanding disclosure expectations under the Securities Act of 1933 and the Securities Exchange Act of 1934.

The guidance doesn’t introduce new rules or a formal checklist – instead, the SEC offers a pattern recognition approach, encouraging token issuers to consider real-world examples when drafting their disclosures.

Shift in Regulatory Approach

The SEC has historically been criticized for regulating the crypto industry primarily through enforcement actions, leading to calls for clearer guidance. In response, the SEC has taken steps to provide more proactive guidance, including:​

• Formation of the Crypto Task Force: Acting SEC Chairman Mark T. Uyeda established this task force to develop a comprehensive and clear regulatory framework for crypto assets
• Recent Statements & Clarifications: The Division’s April 10^th statement is part of a broader effort to offer clarity to market participants during ongoing regulatory deliberations.​

These developments indicate a move towards a more structured and transparent regulatory environment for crypto assets, aiming to balance innovation with investor protection.​

The Disclosure Requirements’ Key Takeaways

The SEC expects token issuers to tailor disclosures to the specific characteristics of the crypto asset and the project ecosystem. These disclosures should be clear, detailed, and decision-useful for investors to understand:

• The nature and purpose of the crypto asset.
• The rights and features associated with the token.
• The structure and governance of the project or network.
• The use of proceeds, potential for token appreciation, or returns.
• Risk factors, including technological, legal, and regulatory risks.
• Relationships among key actors, including promoters, developers, and affiliated entities.

Looking Ahead: Navigating SEC Expectations With Confidence

As the regulatory landscape continues to evolve, the SEC’s latest statement is a reminder that thoughtful, transparent disclosures aren’t just a compliance exercise – they’re foundational to building trust with investors and regulators alike. Token issuers don’t need to guess at expectations anymore; the path forward is becoming clearer.

Need help navigating the details? Wolf’s Digital Assets team is here to guide you through the shifting terrain – bringing structure to speculation, and clarity to compliance.