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The SEC delays defining "digital assets" for hedge and private equity funds, despite proposing a definition 9 months ago for more accurate reporting.
The US Securities and Exchange Commission (SEC) is delaying the ratification of the definition of "digital assets" in its rules for hedge and private equity funds, despite proposing a definition around nine months ago. On 3 May, the SEC published amendments to Form PF, which SEC-registered funds complete to disclose basic information about their fund.
The regulator had originally included a definition of digital assets in an August 2022 proposal. The definition included terms such as virtual currencies, coins, and tokens, and stated that digital assets were "issued and/or transferred using distributed ledger or blockchain technology".
The SEC had proposed this definition to obtain more accurate reporting on digital assets, as the current reporting results in "less robust Form PF data for analysis". However, the regulator has not yet adopted the definition, stating that it is "continuing to consider this term" and will not include it as part of the current rule.
The latest updates to the SEC's Form PF rules require SEC-registered funds to report key events that could indicate systemic risk or harm to investors, and disclose details of their fees and expenses.
The SEC has previously stated that cryptocurrencies are securities under its remit, and SEC Chair Gary Gensler has claimed that the US crypto sector is violating securities laws. In April, the SEC announced that it would revisit its definition of an "exchange" to potentially include decentralized finance.