Following the FTX collapse that triggered more bankruptcies in the crypt industry, SEC asks public companies to detail their exposure to the troubled entities
Public companies should detail their exposure to troubled crypto entities to estimate risks. Source: shutterstock.com
The Securities and Exchange Commission (SEC) has published a notice regarding possible disclosure obligations public companies would face. The required details concern the direct or indirect impact that recent crypto bankruptcies may have had on businesses.
The regulator published a set of sample questions helping to assess the risks from individual crypto exposure. Some queries concentrate on identifying the credit connections to the now-bankrupt FTX and its affiliates. The others aim to establish the firm’s dependence on crypto assets in general. The sample questionnaire deals with both material and reputational risks a business may face.
Although the SEC did not mention any specific firms in the notice, it is expected that dozens of public companies would receive similar queries, depending on their circumstances.
The most obvious candidates include crypto-centric firms like Coinbase or Marathon Digital Holdings. According to a recent letter from US senators, Silvergate bank is also tightly linked to the FTX-Alameda shady accounting.
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