Compliance of Issuing Coins: A Detailed Explanation of the SEC's "Securities Issuance and Registration of Cryptocurrency Assets" in the United States

The SEC has issued heavy disclosure guidelines to point out clear paths and standards for crypto projects to issue tokens compliantly. This article is from the Mankiw Blockchain article and reprinted by PANews. (Synopsis: SEC postpones Ether spot ETF pledge, "ETH benefits all disappear" The fastest rebound may be in June) (Background supplement: The new chairman of the SEC is out!) Paul Atkins passes Senate, U.S. regulation enters a new crypto-friendly era On April 10, 2025, the Division of Corporation Finance of the U.S. Securities and Exchange Commission (SEC) released a heavyweight policy document: Offerings and Registrations of Securities in the Crypto Asset Markets. Although the title is mild, for the Web3 industry, it is essentially a standardized "disclosure file guide" for the coin. This is not a new enforcement announcement or a penalty notice for a project, but a very practical disclosure guide. It is very rare for the SEC to tell you in nearly four thousand words: if you want to issue tokens and raise funds in the United States, you must write these things clearly and clearly. You can think of it as a prospectus for Web3 projects to the U.S. capital markets, and a clear boundary map for the industry drawn by the SEC. Background: Why did the SEC issue this dossier? In recent years, more and more Web3 projects have taken the compliance path and tried to raise funds publicly in the form of securities, and many projects have adopted the following methods: Register a public offering with the SEC through Form S-1 (quasi-IPO); Use Reg A+ for small fundraising, bypassing the full IPO process; Form 20-F submitted by the overseas team to enter the U.S. market; Even ETF products linked to tokens are issued with trust structures. The SEC noted a wide variety of registration dossiers for different projects, ranging from complete copies of white papers, to technical jargon with no substance, or even basic risk factors. In order to regulate the operation of the industry, the SEC Corporate Finance Department issued this policy, which lists the core contents that must be disclosed when offering and raising funds. It has no legal effect, but has essentially become the industry's default registration reference standard. The text begins with a special name: "To provide greater clarity on the application of the federal securities laws to crypto assets..." – providing clearer guidance on how securities laws apply to crypto assets. Business disclosure: not about dreams, but about what you are doing The SEC emphasizes that project parties must submit a complete description of their business. This passage, which is standard in traditional IPOs, is now explicitly 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, do not fool investors with the narrative of "blockchain + future vision", but write it clearly: What project are you working on? Is it L2? DEX？ GameFi? DePIN？ Where far does the project go now? Is there a mainnet? Number of users? On-chain active data? Will you still operate after the launch? Dissolution of the project party? Or to the DAO? Does the DAO have a clear governance structure? How do you make a profit? Is there a clear path to monetization? Relying on fees, token premiums, ecological feedback? What does a token do? Is it governance, gas, service certificate, or an investment certificate? In particular, the SEC pointed out that "talking about technology and ecology" cannot replace the real business situation, nor can it copy the white paper. The material must reflect your specific, clear, and quantifiable business model. Technical structure disclosure: When you say there is a chain, you have to explain the structure of the chain clearly The biggest highlight of this SEC file is that the technical disclosure section is written in unprecedented detail. 「The objectives of the network and how the technology… functions and accomplishes its objectives, including architecture, software, key management…」 This includes the following: the objectives, uses, and implementation mechanisms of networks and applications; Consensus mechanism, transaction confirmation method, block size, gas mechanism, transaction throughput; Wallet system and key management method (whether self-custody, whether multi-signature is supported); Is the web open source? Who does the IP belong to? Are there any patent disputes? Is the network upgrade mechanism configured? What is the upgrade proposal process? Who has execute permissions? If governance is done through smart contracts, are those contracts audited? Who will maintain it? Is it upgradeable? The SEC also requires the project to describe the responsibilities and interactions of various roles in the network, including users, developers, validators, governance participants, off-chain service providers, and so on. You can no longer just say "we have a chain and on-chain execution", but explain the technical details, governance mechanism, and upgrade logic of the chain as if describing a company's governance structure. Not all of these items may apply to every project, and the SEC does not require all projects to disclose them, saying instead that "if they are part of your project and are significant to investors, then you must disclose them." Token disclosure: If you issue securities, disclose them according to the standard of securities This part of the SEC is very straightforward: if the token you issue belongs to the category of securities (most likely it is), then you have to explain its attributes and rights structure like disclosing stocks. 「Rights, obligations, and preferences… including voting rights, liquidation rights, redemption terms, etc." You need to answer the following questions: Does Token represent the right to proceed from an asset? Liquidation right? Voting rights? Is the token transferable? Are there lock-ups, lock-ins, circulation restrictions? Does it have functions such as splitting, pledging, buyback, and burning? How are the rules set? What is the mechanism of token generation? Is it a one-time mint? Regular release? Is there an upper limit? Is there a special token structure for the DAO (e.g. governance token vs. economic token)? Does the contract support upgrades? If so, who has permission to modify the logic? Have you done a third-party audit? Are audit reports publicly available? You can design your token model with strong technical logic, but in the end you have to follow the language that the SEC is used to,...