SEC asks companies to inform investors about struggling cryptocurrency firms

The Securities and Exchange Commission (SEC) has asked publicly-traded companies to inform investors about any sort of involvement with struggling cryptocurrency firms. 

In a notice released on Thursday, the SEC said that the companies are obligated under federal law to disclose if the turbulent crypto market has impacted their finances or operations. 

The SEC’s Division of Corporation Finance, the branch that makes sure that companies disclose necessary information to investors, has issued this notice, which is supposed to help companies prepare disclosure documents. 

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The notice does not formally introduce new disclosure requirements. However, the recommendations are being seen as a sign of the regulator keeping a closer eye on cryptocurrency. 

The SEC said that companies should discuss whether they have been exposed to crypto firms that have suspended withdrawals, filed for bankruptcy, or experienced excessive withdrawals. 

It also asked companies to disclose the steps they are taking to secure the customers’ crypto assets, as well as whether the upheaval in the crypto market has caused them any reputational harm.