The Securities and Exchange Commission (SEC) of the United States has delayed the ratification of the definition of “digital assets” in rules governing reporting disclosures for hedge and private equity funds, despite proposing to do so about nine months ago.
In amendments to Form PF published on May 3, which SEC-registered funds complete to disclose basic information about their fund so the regulator can assess potential “systemic risks,” the regulator did not include a definition of digital assets.
In an August 2022 proposal for the changes, the SEC defined digital assets as assets “issued and/or transferred using distributed ledger or blockchain technology”. It included terms such as “virtual currencies,” “coins,” and “tokens.”
Today the SEC finalized their new Form PF rules. The proposal included the 1st definition of “digital assets” in a rule. It is interesting that the SEC choose to NOT adopt the definition in their final rule. https://t.co/5y1UXbJqBd
— Anne Kelley (@amk_dc) May 3, 2023
However, the SEC is not currently adopting the digital assets definition. The SEC proposed the definition to obtain more accurate reporting on funds’ exposures to digital assets and to understand better their overall market exposures. The SEC has made other crypto-related definitions, including the possibility of revising its definition of an “exchange” to include decentralised finance (DeFi).
SEC Chair Gary Gensler has been vocal about classifying cryptocurrencies as securities under the commission’s remit and violating securities laws by the U.S. crypto sector.