Blockworks Asks SEC to Allow Optional Agents for Token Disclosures

Blockworks, Inc. is urging the SEC to let token issuers use an optional disclosure agent that would preserve dated public records, giving investors a way to track changes under proposed crypto fundraising rules.

In an Oct. 20 letter addressing Regulation Crypto Assets, Blockworks proposed a Qualified Onchain Disclosure Agent to help prepare disclosures and maintain a free, searchable archive of current and earlier versions. Issuers would approve what the agent publishes and remain responsible for the content.

The agent could use blockchain data, but the plan would not require every disclosure to be stored on a blockchain. Its role would be to keep a public record that readers could search and compare over time.

Blockworks separately wants the SEC to require issuers to describe loans to market makers, listing agreements and token payments to advisers and influencers. Issuers would also identify relevant wallet and contract addresses and explain how they calculate token supply.

The SEC’s proposed fundraising exemptions include a startup provision allowing eligible issuers to raise up to $5 million over four years. A separate exemption would allow up to $20 million or $75 million in a 12-month period, depending on the tier. The exemptions have not taken effect.

Under the startup provision, an issuer could post substantive disclosures at the web address it lists in a notice of reliance filed with the SEC. The agency is weighing whether those disclosures should instead be filed on EDGAR. It also asked whether issuers should keep earlier website versions available and identify changes.

Blockworks’ Token Transparency Framework held 213 disclosures as of Oct. 15: 117 filed by projects and 96 compiled by Blockworks from public information. The company operates the framework commercially. It could charge for bulk or programmatic access to a repository it runs while keeping public reading free.

In a separate comment, securities lawyer M. Tilden Moschetti urged the SEC to require permanent disclosures and amendments on EDGAR. “A website is not EDGAR,” he wrote.

The SEC set Oct. 20 as the comment deadline. It has not adopted a final rule.