Hong Kong crypto exchange folds to regulatory pressure

US Securities and Exchange Commission staff have given guidance on how federal securities laws could apply to crypto, saying companies issuing or dealing with tokens that could be securities should give better details about their business.The SEC’s Division of Corporation Finance said in a staff statement on April 10 that it was giving its views “to provide greater clarity on the application of the federal securities laws to crypto assets.” The Division said its statement was made of observations of disclosures given in existing disclosure requirements and “addresses our views about certain specific disclosure questions that market participants have presented to the staff.”The guidance, which the Division noted had “no legal force or effect,” said crypto companies who are giving disclosures about their business have typically shared a host of information about their operations, such as what the company specifically does, how any issued tokens work and how the business generates — or intends to generate — revenue.Companies have also disclosed whether they plan to remain engaged in a crypto network or app after they launch it and, if not, whether any other entities will take over.Crypto firms should also explain their technology, such as if their product is a proof-of-work or proof-of-stake blockchain, its block size, transaction speed, reward mechanisms, the measures to ensure network security and whether the protocol is open-source or not.The SEC staff also noted that registration or qualification is not required in connection with crypto offerings that aren’t securities and aren’t part of an investment contract. However, the statement didn’t provide clarity on what digital assets could be securities.Commercial litigator Joe Carlasare told Cointelegraph the statement was “a welcome and refreshing step toward clearer regulatory guidance.”“Adhering to the guidelines will help entities not only position themselves more favorably with regulators but also demonstrate a commitment to transparency and credibility,” he said.Crypto firms should share all risksThe SEC staff statement said that issuers usually clearly disclose risks related to price volatility, network and cybersecurity vulnerabilities, and custody risks, in addition to standard business, operational, legal and regulatory risks.A “materially complete description” of a security is also typically required from an issuer, which includes the mechanism behind paying dividends, distributions, profit-sharing and voting rights, including how those rights are enforced.Related: No crypto project has registered with the SEC and ‘lived to tell the tale’ — House committee hearingIt added a company should share if a protocol’s code can be modified, and if so, who can make such changes and whether the smart contracts involved have been subjected to a third-party security audit.Other disclosures the statement mentioned are whether the token’s supply is fixed and how it was or will be issued along with identifying executives and “significant employees.”The Division said its guidance intended to build on the SEC’s Crypto Task Force, which is planning to host a series of roundtables with the crypto industry to discuss how it should police crypto trading, custody, tokenization and decentralized finance.Magazine: SEC’s U-turn on crypto leaves key questions unanswered

US President Donald Trump on April 10 signed a joint Congressional resolution overturning a Biden-era rule that requires decentralized finance (DeFi) protocols to report to the country’s tax authority, the Internal Revenue Service.The rule would have required DeFi platforms, such as decentralized exchanges, to file their gross proceeds from crypto sales and include information on those involved in the transactions.Trump was widely expected to sign the bill, as White House AI and crypto czar David Sacks said in March that the president would support killing the measure.This is a developing story, and further information will be added as it becomes available.

The US Securities and Exchange Commission (SEC) has dismissed a lawsuit against Nova Labs, developer of decentralized wireless network Helium, for allegedly issuing unregistered securities, Helium stated in an April 10 blog post. Filed in January 2025, the lawsuit was among the SEC’s final enforcement actions against a cryptocurrency developer under former Chair Gary Gensler, who stepped down from his post on Jan. 20 after US President Donald Trump took office. The dismissal with prejudice means the blockchain developer cannot be charged with similar violations again for issuing in 2019 its native token Helium (HNT), the company said. “[W]e can now definitively say that all compatible Helium Hotspots and the distribution of HNT, IOT, and MOBILE tokens through the Helium Network are not securities,” Helium said. “[T]he outcome establishes that selling hardware and distributing tokens for network growth does not automatically make them securities in the eyes of the SEC [and] that the SEC cannot bring these charges against Helium again,” it added.Source: HeliumThe SEC’s Helium reversal came the same day Trump-nominee Paul Atkins formally replaced Gensler as SEC Chair after a lengthy confirmation process in the Senate. Helium is a blockchain network designed to let “anyone build and own massive wireless networks,” according to its website. The protocol reports having roughly 375,000 active hotspots. According to CoinGecko, HNT has a market capitalization of approximately $480 million as of April 10 — down from highs of more than $5 billion in November 2021. HNT’s price since 2019. Source: CoinGeckoRelated: SEC will drop its appeal against Ripple, CEO Garlinghouse saysChanging policy stanceUnder Gensler, the SEC brought upward of 100 charges against Web3 developers for various alleged securities violations. Since Trump took office, the SEC has sharply reversed course, dropping numerous charges against crypto firms, including Coinbase, Kraken, Ripple and Uniswap. Trump has positioned himself as a pro-crypto President, promising to make America the “world’s crypto capital,” appointing industry-friendly leaders to key regulatory posts, and ordering the federal government to create a national Bitcoin (BTC) reserve.For some crypto executives, Trump’s policies — such as announcing sweeping tariffs on US imports in April — threaten to stymie crypto’s progress.Magazine: 3 reasons Ethereum could turn a corner: Kain Warwick, X Hall of Flame