The SEC’s Division of Corporation Finance has issued nonbinding guidance regarding the application of federal securities laws to cryptocurrencies. The statement emphasizes that companies dealing with tokens that may qualify as securities need to enhance their disclosures about business operations and revenue generation. The guidance, provided on April 10, aims to clarify existing disclosure requirements based on market participant inquiries. Firms are urged to offer comprehensive information regarding their activities, token functionalities, revenue models, and future plans post-launch. Additionally, they should disclose risks linked to price volatility, cybersecurity, and business operations. The SEC clarified that registration is unnecessary for crypto offerings not deemed securities or investment contracts. Legal expert Joe Carlasare welcomed the guidance as a positive step towards regulatory clarity, suggesting that adherence to these guidelines would strengthen relationships between crypto entities and regulators.

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