SEC issues new guidance for disclosure requirements on crypto ETFs, addressing risks and custody

The SEC’s Division of Corporation Finance issued new guidance detailing disclosure requirements for crypto asset exchange-traded products, addressing federal securities laws’ application to these investment products trading on national securities exchanges. This comes as interest in crypto ETFs surges following the launch of Bitcoin and Ethereum ETFs.

The guidance requires detailed risk factor disclosures specific to crypto assets, including risks related to price volatility, private key theft, hacking incidents, and potential manipulation on crypto trading platforms. It also mandates extensive disclosure on custody arrangements for private keys, storage methods, and access to private key information.

Issuers must disclose information about underlying crypto assets, including how they are generated, consensus mechanisms used, and any fees associated with network usage. Service provider relationships, authorized participants, fee structures, voting rights, and financial reporting for multi-series trusts are also addressed under the new guidance.

Read more at Yahoo Finance: SEC Issues New Crypto ETF Disclosure Rules