New cybersecurity regulations have been adopted by the United States Securities and Exchange Commission (SEC), mandating all public companies, including listed crypto firms, to promptly disclose any significant cybersecurity incidents within a strict four-day time frame.
The rules, effective as of July 26, will require disclosure when the incident is deemed “material,” except in cases where national security or public safety might be compromised.
The SEC’s initiative aims to strengthen cybersecurity risk management measures and safeguard the interests of investors.
To achieve this, the new regulations necessitate periodic reporting of a registrant’s policies and procedures for identifying and managing cybersecurity risks, along with regular updates about previously reported incidents.
SEC Chair Gary Gensler emphasized that these rules play a crucial role in benefiting investors, companies, and the overall market by ensuring that companies share material cybersecurity information transparently.
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The scope of these regulations encompasses all publicly listed companies in the United States, including prominent players in the crypto industry such as Coinbase (COIN), Marathon Digital (MARA), Riot Blockchain (RIOT), and Hive Digital Technologies (HIVE).
The SEC outlined the rationale behind these new rules, citing the growing prevalence of digital payments and digitized operations within the workforce.
This, coupled with cybercriminals’ ability to monetize cybersecurity incidents, necessitated the implementation of stricter regulations to safeguard investors from potential threats.
Cryptocurrencies have notably been targeted by various cybercriminals, including the North Korean state-backed Lazarus Group, which has executed high-value exploits on cryptocurrency platforms, amassing over $850 million in ill-gotten gains.
It’s worth noting that the cybersecurity rules were initially proposed by the SEC in March 2022 but have now been fully adopted to enhance cybersecurity protection for investors and bolster overall market integrity.
The rules are set to be effective within 30 days following their publication in the Federal Register.
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