The U.S. Securities and Exchange Commission is holding back from adopting a definition of “digital asset” in disclosure rules for hedge funds and private equity, despite proposing to do so some time ago. About nine months.
On May 3, the Securities and Exchange Commission (SEC) issued changes to Form PF – a form of funds that are registered with the SEC to disclose basic information about their funds so that the regulator can assess “systemic risk.”
The SEC first included the definition of digital assets in the August 2022 plan for the exchange. If it becomes operational, it will be the first time the SEC has defined a “digital asset.”
Fast forward to today and the moderator says he is not moving forward with adding details, even now.
The SEC’s proposed definition of digital asset is an asset “created and/or transferred using ledger or blockchain technology” and includes other commonly used terms such as “virtual currency”, “coin” and “token”.
The SEC said in its August proposal that information about the digital assets of money is now being reported in “other” groups and produced “PF data that is not strong enough for analysis.”
It proposed the specification to obtain a classification and, by extension, a more accurate report about these assets. However, the most recent update to the SEC’s Form PF rules now requires – among other new requirements – that SEC-registered funds report key events that may indicate systemic risk and it is an injury to investors and a possible response to the US banking crisis.
Companies will also have to disclose details of their debts and expenses as the SEC tries to shed light on the multi-trillion dollar sector. The SEC has not always shied away from crypto-related definitions, announcing in mid-April that it would revise its definition of “devolution” to include decentralized finance (DeFi).
SEC Chairman Gary Gensler has also long stated that cryptocurrencies are securities within his oversight and that US crypto companies are violating securities laws.
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