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A Closer Look at the US SEC "Securities Issuance and Registration of Crypto Assets"

Written by: Liu Honglin, Shao Jiaio

 

On April 10, 2025, the U.S. Securities and Exchange Commission's (SEC) Division of Corporation Finance released a heavyweight policy document: "Offerings and Registrations of Securities in the Crypto Asset Markets." While the title is mild, it is essentially a standardized "disclosure document guideline" for the Web3 industry.

 

This is not a new enforcement announcement, nor is it a penalty notice for a particular project, but a very practical disclosure guideline. It is very rare for the SEC to tell you in nearly 4,000 words: if you want to issue tokens and raise funds in the United States, then you must write these things clearly and explain clearly.

 

You can think of it as a manual for Web3 projects to access the U.S. capital market, and a clear boundary map drawn by the SEC for the industry.

 

Background: Why did the SEC issue this document?

 

In recent years, more and more Web3 projects have taken the path of compliance and tried to raise funds publicly in the form of securities, and many projects have adopted the following methods:

 

• Register with the SEC on Form S-1 for a public offering (quasi-IPO);

• Leverage Reg A+ for small fundraising, bypassing the full IPO process;

• Submit Form 20-F to enter the U.S. market by an overseas team;

• Even use a trust structure to issue token-linked ETF products.

 

The SEC noted that the registration documents submitted by different projects varied from one project to another, ranging from a complete copy of a white paper, to a barrage of technical jargon with no substance, and even to a vague collection of underlying risk factors. In order to regulate the operation of the industry, the SEC's Corporate Finance Department issued this policy, which lists the core content that must be disclosed when issuing funds for issuance. It has no legal effect, but in essence it has become the industry's default reference standard for registration.

正文开头特别点名：「to provide greater clarity on the application of the federal securities laws to crypto assets…」

- Provide clearer guidance on how securities laws apply to cryptoassets.

 

Business disclosure: It's not about dreams, it's about what you're doing

 

The SEC emphasizes that project parties must submit a complete description of their business. This phrase was standard in traditional IPOs, and is now explicitly introduced into the token registration process.

 

「Issuers are required to disclose information material to an understanding of the general development of their business.」

 

To put it bluntly, don't fool investors with the narrative of "blockchain + future vision", but write it clearly:

 

• What project do you do? Is it L2? DEX？ GameFi？ DePIN？

• Where is the project now? Is there a mainnet? How many users? On-chain active data?

• Are you still running after you go live? Dissolution of the project team? Or do you leave it to the DAO? Do DAOs have a clear governance structure?

• How do you make a profit? Is there a clear path to monetization? Relying on fees, token premiums, and ecological feedback?

• What exactly is a token for? Is it a governance, gas, service certificate, or an investment certificate?

 

In particular, the SEC pointed out that "talking about technology and ecology" cannot be used as a substitute for real business conditions, nor can it be copied from white papers. Your business model must be concrete, clear, and quantifiable in the material.

 

Technical structure disclosure: If you say that there is a chain, you have to explain the structure of the chain clearly

 

The biggest highlight of the SEC filing is that the technical disclosures are written in unprecedented detail.

 

「The objectives of the network and how the technology… functions and accomplishes its objectives, including architecture, software, key management…」

 

Specifically, it includes the following:

 

  • the goals, uses, and operating mechanisms of networks and applications;
  • Consensus mechanism, transaction confirmation method, block size, gas mechanism, transaction throughput;
  • Wallet system and key management method (whether it is self-custody and whether it supports multi-signature);
  • Is the network open source? Who does the IP belong to? Are there any patent disputes?
  • Is there a network upgrade mechanism? What is the upgrade proposal process? Who has executive authority?
  • If governed through smart contracts, are those contracts audited? Who will maintain it? Is it upgradeable?

 

The SEC also requires projects to explain the responsibilities and interactions of the various roles in the network, including users, developers, validators, governance participants, off-chain service providers, and more. You can no longer just say "we have the chain and run on the chain", but you should explain the technical details, governance mechanism, and upgrade logic of the chain as if you were describing a company's governance structure.

 

The SEC does not require all projects to disclose these contents, but rather says that "if they are part of your project and material to investors, you must disclose them."

 

Token disclosure: If you issue securities, you will disclose them according to the standard of securities

 

This part of the SEC writes very bluntly: if the token you issue belongs to the category of securities (most likely), then you have to explain its attributes and power structure as if it were a stock.

 

「Rights, obligations, and preferences… including voting rights, liquidation rights, redemption terms, etc.」

 

You'll need to answer the following questions:

 

  • Does Token represent the right to income from assets? Right of liquidation? Suffrage?
  • Is the token transferable? Are there any lock-ups, lock-ups, or circulation restrictions?
  • Does it have functions such as splitting, staking, reponing, and burning? How are the rules set?
  • What is the mechanism for generating tokens? Is it a one-time mint? Regular releases? Is there a limit?
  • Is there a special token structure for the DAO (e.g., governance token vs. economic token)?
  • Does the contract support upgrades? If so, who has permission to modify the logic?
  • Have you done a third-party audit? Is the audit report public?

 

You can design your token model with strong technical logic, but in the end you still have to translate the model for review in the language that the SEC is used to. At this time, it is not about innovation, but about "whether you can explain it".

 

Risk disclosure: It's not just price fluctuations, but every point where you worry about things going wrong

 

The SEC has always been the most sensitive to risk disclosures. It emphasizes that risk is not a decoration of the process, but an obligation of the project.

 

「Material factors that make an investment speculative or risky… including technological, regulatory, and operational risks.」

 

The risks you must disclose are not limited to "token price fluctuations":

 

Risks associated with the business operations of the issuer's program, such as those related to technology and cybersecurity, as well as the implementation of the issuer's business, and reliance on other networks or applications.

 

Risks associated with securities, such as those relating to any distinctive characteristics of securities, including their form, price fluctuations, rights of holders or their lack thereof, valuation and liquidity, supply and custody.

 

Risks associated with other applicable laws and regulations, such as whether the issuer's activities are required to register with the Financial Crimes Enforcement Network or certain state financial services agencies under remittance laws, or with other regulatory agencies, such as federal or state banking regulators or the Commodity Futures Trading Commission.

These must be disclosed truthfully, even if they sound like they will "affect financing". The SEC's bottom line is "don't hide," or you'll wait for the SEC to send a letter.

 

Issuer management information disclosure: who is the trader and who takes the money must be written

 

You can say that you are a DAO project or a foundation control, but the SEC will not listen to you introduce yourself, it will look at "who is making decisions, who can issue tokens, and who has received substantial benefits".

 

「Disclosure is required for persons who do not hold formal titles… but who perform policy-making functions.」

 

  • Who is the management of the issuer? Information about their identity and experience
  • Who is involved in project governance, funding decisions, and roadmap development?
  • Which service providers are running the project? Have you paid consulting fees and technical fees?
  • Are there employees or teams that hold a large number of tokens?
  • Do you host smart contracts or network code to a specific team/organization?

 

Even if you use the most complex structure, you must disclose the de facto controller. The SEC is not hostile to structural design, as long as you don't "sell dog meat on the head of a sheep."

 

Finance & Audit: You didn't just issue a token, you brought yourself into the SEC's field of vision

 

Many project parties will say, "I don't have operating income, why do I need financial statements?" The SEC is not asking you to embellish your financial statements, but it is asking you to make these things clear:

 

  • Are tokens counted as assets? Is the pre-sale treated as a liability?
  • Do you use the Token Consideration Payment Service? How is it measured?
  • Do Token Incentives, Token Releases, Staking Interest, etc. constitute fees?
  • Is there an on-chain revenue stream? How are they confirmed and audited?
  • Does a token generate dividends, rebates, or compound interest similar to traditional securities?

 

原文写道：「Issuers are required to provide financial statements that comply with applicable requirements…」

 

You'll need to file financial statements in a standard format (especially the S-1, Reg A+, 20-F pathways) and make clear accounting for the assets, liabilities, revenues, and expenses associated with the token.

 

The SEC specifically pointed out that if your token rules are written in the contract and the on-chain governance rules are determined by the code, then the code itself must be submitted as an exhibit (official addendum), and the updates must be synchronized.

 

「We have observed filings include as an exhibit the code of the smart contract(s)…」

 

Other words:

 

  • Smart contract addresses, versions, and audits should be disclosed simultaneously;
  • Whether the escalation logic exists and whether it is controlled by a few people should also be explained;
  • If the contract controls the token release rules, then this is your project's "security protocol".

 

Lawyer Mankiw concluded: Compliance is a collective coming-of-age ceremony in the industry

 

Many entrepreneurs' first reaction when they see this SEC document is, "It's too complicated, let's do it in another country." But this document is not a rejection of Web3, but an attempt to invite Web3 to the open market and to institutionalize.

 

It's not a red light, it's a road map.

 

Do you want to actually get your hands on the money of traditional institutions? Do you want the project to be traded on the mainstream market? Do you want to live for a long time and not be afraid of any judicial letters? Then you have to adapt to this disclosure requirement, manage your token with the logic of securities, and operate your project with a public corporate awareness.

 

The SEC doesn't tell you how to design a token, but it does tell you what information you can't hide and what structures you can't play. This checklist is your compass for compliant financing to the U.S. market.

 

If you're a Web3 project owner, a trading platform, a fund, a lawyer, an auditor – now is the time to grab this document and revisit everything you're prepared to submit to the SEC.

 

This article is sourced from Foresight News:

https://foresightnews.pro/article/detail/82201

Respectfully submitted by the AIC Team

April14, 2025