SEC advises public firms to disclose crypto risks




  • In Business
  • 2022-12-09 08:07:34Z
  • By Forkast News
 

The U.S. Securities and Exchange Commission (SEC) has advised publicly-listed firms to disclose their exposure to the cryptocurrency market, in light of the fallout of the FTX collapse.

See related article: FTX owes US$3.1 billion to top 50 unnamed creditors, court filing shows

Fast facts

  • The SEC said in a notice released on Thursday that companies should evaluate their disclosures about their situation in relation to the recent risk events in the crypto market.

  • "Recent bankruptcies and financial distress among crypto asset market participants have caused widespread disruption in those markets," the SEC said.

  • It added: "Companies may have disclosure obligations under the federal securities laws related to the direct or indirect impact that these events and collateral events have had or may have on their business."

  • Last month, crypto exchange FTX filed for Chapter 11 bankruptcy, with its abrupt implosion sparking an industry-wide contagion.

  • A bankruptcy filing in late November showed that FTX Trading Ltd. and its affiliates owe their 50 largest creditors about US$3.1 billion, and another FTX filing in the same month indicated that it has more than 100,000 creditors and that figure could exceed one million.

  • At FTX's first bankruptcy hearing last month, an attorney for the company said the company was run as "personal fiefdom" of Sam Bankman-Fried and that a "substantial amount of assets" has either been stolen or gone missing.

See related article: Bankman-Fried may face subpoenas if he does not testify

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