The US Securities and Exchange Commission (SEC) is sending letters to US publicly listed companies asking them to evaluate their disclosure obligations following the collapse of the crypto exchange FTX.
Specifically, the governmental body wants to know how the recent crypto bankruptcies and broader financial distress in the digital space may have impacted companies' business.
In the letter, the SEC asks companies to show their relationship with other firms that have filed for bankruptcy, have crypto assets unaccounted for or experienced corporate compliance failures.
“In meeting their disclosure obligations, companies should consider the need to address crypto asset market developments in their filings generally, including in their business descriptions, risk factors, and management’s discussion and analysis,” the SEC’s division of corporate finance said, quoted in a Yahoo Finance report.
The letter also encourages companies to share how they protect customer crypto assets, as well as the governance protocols they have in place to prevent conflicts of interest.
Last month, crypto exchange FTX filed for bankruptcy with an US$8bn hole in its balance sheet, which is believed to be the result of the company lending money to Alameda Research, the trading firm of FTX's founder and former CEO, Sam Bankman-Fried.
When asked whether cryptocurrencies needed their own set of tailored rules, SEC chair Gary Gensler told Yahoo Finance that the agency would enforce measures already in place.