Compliance with issuance of coins? Detailed explanation of US SEC's "Securities Issuance and Registration of Crypto Assets"

Authors of this article: Liu Honglin, Shao Jiayi

On April 10, 2025, the Division of Corporation Finance of the U.S. Securities and Exchange Commission (SEC) issued a heavyweight policy document: Offerings and Registrations of Securities in the Crypto Asset Markets. Although the title is moderate, for the Web3 industry, it is essentially a standardized " disclosure document guide " for issuing coins.

This is not a new law enforcement announcement or a penalty notice for a certain project, but a very practical disclosure guide . The SEC rarely tells you one by one in nearly 4,000 words: If you want to issue tokens in compliance with the United States and raise funds, you must write down these things clearly and explain them clearly.

You can treat it as a manual for the Web3 project to lead to the US capital market, and it is also a clear boundary map drawn by the SEC for the industry.

Background: Why does the SEC issue this document?

In recent years, more and more Web3 projects have taken the compliance path and tried to raise funds publicly in the form of securities. Many projects have adopted the following methods:

• Registered public offering (IPO class) with the SEC through Form S-1 ;

• Use Reg A+ to raise funds in small amounts to bypass the complete IPO process;

• Submit Form 20-F to enter the US market by overseas teams;

• Even use a trust structure to issue ETF products linked to Token.

The SEC noticed that the registration documents submitted by different projects were diverse, some were completely copied from white papers, some were piled up with technical terms but had no substantive content, and even some even concealed the basic risk factors. In order to standardize industry operations, the SEC Company Financing Department has issued this policy, listing the core content that must be disclosed when raising funds by issuing coins. It has no legal effect, but it is essentially the industry 's default registration reference standard .

The text is specially named at the beginning: "to provide greater clarity on the application of the federal securities laws to crypto assets..."

——Provide clearer guidance on how crypto assets can apply to securities laws.

Business Disclosure: Not about dreams, but about what you are doing

The SEC stressed that the project party must submit a complete description of its own business. This passage is standard in traditional IPOs and is now clearly introduced into the Token registration process.

“Issuers are required to disclose information material to an understanding of the general development of their business.”

To put it bluntly, you should not use the narrative of "blockchain + future vision" to fool investors, but should write it clearly:

• What project are you doing? Is it L2? DEX? GameFi? DePIN?

• Where is the project going now? Is there a mainnet? Number of users? Active data on the chain?

• Will you still operate after it goes online? The project party is dissolved? Or leave it to DAO? Does DAO have a clear governance structure?

• How do you make a profit? Is there a clear monetization path? Rely on handling fees, token premiums, and ecological feeding?

• What exactly does Token do? Is it a governance, gas, service certificate, or an investment certificate?

The SEC specifically pointed out that "talking about technology and ecology" cannot be used instead of real business situations, nor can it copy the white paper. Your specific, clear and quantifiable business model must be reflected in the material.

**Technical structure disclosure: If you say there is a chain, you have

to explain the structure of the chain clearly**

The biggest highlight of this SEC document is that the technical disclosure part is written in unprecedented detail.

“The objectives of the network and how the technology… functions and accomplishes its objectives, including architecture, software, key management…”

Specifically includes the following content:

• The objectives, uses and operating mechanisms of networks and applications;

• Consensus mechanism, transaction confirmation method, block size, Gas mechanism, and transaction throughput;

• Wallet system and key management method (whether self-hosting and whether it supports multiple sign-ups);

• Is the network open source? Who does the IP belong to? Is there any patent dispute?

• Is there a network upgrade mechanism? What is the process of upgrading proposals? Who has execution permissions?

• If governed through smart contracts, are these contracts audited? Who will maintain it? Is it upgradable?

The SEC also requires projects to explain the responsibilities and interaction methods of various roles in the network - including users, developers, validators, governance participants, off-chain service providers, etc. You can no longer just say "we have a chain and run on the chain", but you should explain the technical details, governance mechanisms, and upgrade logic of the chain clearly, just like describing a corporate governance structure.

The above projects may not be all applicable to every project. The SEC does not force all projects to disclose these contents, but says, "If these contents are part of your project and are significant to investors, you must disclose them."

**Token Disclosure: You are issuing securities, and you will disclose

them according to the securities standards.**

This part of the SEC is very straightforward: If the token you issue falls into the category of securities (most likely), then you have to explain its attributes and rights structure clearly like you would disclose stocks.

“Rights, obligations, and preferences… including voting rights, liquidation rights, redemption terms, etc.”

You need to answer the following questions:

• Does a token represent the right to earn an asset? Liquidation right? Voting rights?

• Is the token transferable? Are there any restrictions on locking up positions, banning sales, and circulation?

• Does it have functions such as splitting, pledging, repurchase, and destroying? How to set the rules?

• What is the generation mechanism of tokens? Is it a one-time mint? Release regularly? Is there any upper limit?

• Is it possible to set up a special token structure for DAO (such as governance token vs. economic token)?

• Does the contract support upgrade? If so, who has the permission to modify the logic?

• Have you done a third-party audit? Is the audit report public?

You can design your Token model with strong technical logic, but in the end you have to translate this model for review according to the language you are used to in the SEC . At this time, it is not about innovation, but about "can you explain it clearly".

**Risk Reveal: Not just price fluctuations, but every point you are

worried about is clear**

SEC has always been the most sensitive to risk disclosure. It emphasizes that risks are not decorations that follow the process, but the obligations of the project.

“Material factors that make an investment speculative or risk… including technical, regulatory, and operational risks.”

The risk you have to disclose is more than "Token price fluctuations":

• Risks related to the business operations of the issuer's program, such as risks related to technology and cybersecurity, as well as the implementation of the issuer's business, and dependency on other networks or applications.

• Risks related to securities, such as those related to any unique characteristics of securities, including their form, price fluctuations, the rights of holders or their lack of rights, valuation and liquidity, supply and storage.

• Risks associated with other applicable laws and regulations, such as whether the issuer's activities require registration with the Financial Crime Enforcement Network or certain state financial services agencies under the remittance law, or with other regulatory agencies, such as the federal or state banking regulator or the Commodity Futures Trading Commission.

All of these must be disclosed truthfully, even if they sound "impact financing." The bottom line of the SEC is "don't hide", otherwise you will wait for the SEC to send a letter.

Information disclosure of the issuer 's management **: Whoever is the

trader and whoever takes the money must be written down**

You can say that you are a DAO project or a foundation control, but the SEC will not listen to your self-introduction. It looks at "who is making decisions, who can issue tokens, and who gets substantial benefits."

“Disclosure is required for persons who do not hold formal titles… but who perform policy-making functions.”

• Who is the management of the issuer? Information about his identity and experience

• Who participated in project governance, funding decision-making, and roadmap formulation?

• Which service providers are operating projects? Have you paid the consultant fee and technical fee?

• Are there employees or teams holding large amounts of tokens?

• Are smart contracts or web code hosted to a specific team/organization?

Even if you use the most complex structural packaging, you must disclose the substantive controller. SEC is not hostile to structural design, it only needs to "sell dog meat with sheep's head".

**Finance and Audit: You didn’t just send a token, but brought yourself

into the SEC’s vision**

Many project parties will say, "I don't have operating income, why do I need financial statements?" The SEC does not want you to beautify your financial statements, but asks you to explain these things:

• Is the token included in the assets? Is pre-sale treated as a liability?

• Do you use the Token consideration payment service? How to measure?

• Do token incentives, token releases, pledge interest, etc. constitute expenses?

• Is there an on-chain revenue stream? How to confirm and audit?

• Does the token generate dividends, rebates or compound interest similar to traditional securities?

The original text reads: "Issuers are required to provide financial statements that comply with applicable requirements..."

You need to submit financial statements in standard formats (especially S-1, Reg A+, 20-F paths) and make clear accounting of the assets, liabilities, income and expenses related to the token.

The SEC specifically pointed out that if your token rules are written in the contract and on-chain governance rules are determined by the code, then the code itself must be submitted as an Exhibit (official appendix) , and the update must be synchronized.

“We have observed filings include as an exhibit the code of the smart contract(s)…”

That is to say:

• The address, version, and audit status of the smart contract must be disclosed simultaneously;

• Whether the upgrade logic exists and is controlled by a few people should also be explained;

• If the contract controls the Token release rules, then this is the "security agreement" of your project.

**Mankun lawyer summary: Compliance is a collective coming-of-age gift

for the industry**

Many entrepreneurs' first reaction to seeing the SEC document is: "It's too complicated, let's change the country." But this document is not a rejection of Web3, but an attempt to inviting Web3 to move towards the open market and institutionalization .

It's not a red light, it's a roadmap.

Do you want to really get the money from traditional institutions? Do you want the project to be traded in mainstream markets? Do you want to live for a long time and aren’t afraid of any judicial letters? Then you must adapt to this disclosure requirement, manage your token with securities logic , and operate your project with public company awareness.

The SEC does not tell you how to design a token, but it tells you what information cannot be hidden and what structure cannot be played with. This list is your compass for compliant financing from the U.S. market.

If you are a Web3 project party, trading platform, fund, lawyer, auditing agency-now is the time to pick up this document and revisit everything you are preparing to submit to the SEC.