The U.S. Securities and Exchange Commission has advised all publicly listed companies in the United States to alert investors of any exposure to cryptocurrencies, noting that “recent bankruptcies and financial distress among crypto asset market participants have caused widespread disruption in those markets.”

The regulator’s Division of Corporation Finance issued a letter on Thursday clarifying that companies’ disclosure obligations ought to be proportional to the direct or indirect impact recent events have had on their business, according to CNBC. The letter also asked firms to describe any material risks resulting from excessive redemptions, withdrawals, or suspension of crypto asset withdrawals.

Essentially, firms will have to disclose their risk exposure to FTX’s bankruptcy and other similar market developments in their filings.

In an interview with Yahoo Finance on Wednesday, SEC Chairman Gary Gensler suggested that FTX and Alameda Research had likely violated securities laws by using customer funds held on the exchange to make trades. 

“I can’t speak to any one case or any one situation, but our securities laws say that you need to properly segregate customer funds,” he said. Crypto companies need to “come into compliance” to prevent the industry’s collapse, he added. 

The crypto industry fell from a high of $1.6 trillion to $800 billion in market cap between November last year and today. Analysis of on-chain data from Glassnode earlier this week shows that all capital inflows into Bitcoin since May 2021 have now been “flushed out,” as investors faced some of the largest realized losses in history.