In new guidance published on Thursday, the Securities and Exchange Commission recommends that companies that issue securities disclose to investors their exposure to potential risk in the cryptocurrency market.

The guidance from the SEC's Division of Corporation Finance, which is in charge of making sure public companies disclose important information to investors, is the newest indication that regulators are on high alert for potential fallout following the failure of major crypto firms like FTX and BlockFi Inc.

The SEC outlined information that companies may be required to disclose to investors, including if the firms have any financially meaningful exposures to counterparties who have declared bankruptcy or otherwise become insolvent.

The advice comes around a month after FTX, one of the world's largest cryptocurrency exchanges, declared bankruptcy after lending customer assets to a risky trading business created by FTX's former CEO Sam Bankman-Fried. The failure of the exchange affected over 100,000 clients.

According to the guidance, the SEC developed a sample letter after conducting a selective review of findings made under the Securities Act of 1933 and the Securities Exchange Act of 1934, which require companies to disclose "such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading."

The issuer is asked to clarify how company bankruptcies and their consequences "have impacted or may impact your business, financial condition, customers, and counterparties, either directly or indirectly," according to a proposed item in the letter.

SEC Chair Gary Gensler deflected criticism on Wednesday that the agency has not done enough to stop cryptocurrency firms from exploiting client funds. Additionally, Gensler stated that if the firms disregard current regulations, the SEC will take additional enforcement measures.

Companies will now be required to disclose in their public filings their ownership of crypto assets as well as their risk exposure to the FTX bankruptcy and other market developments. According to the company's bankruptcy filings, it has more than 1 million creditors.

The SEC's corporate finance division recommended organizations to follow these guidelines when preparing papers "that may not typically be subject to review by the Division before their use."

The advice is applicable to any public companies that have exposure to the current crypto turmoil. Although publicly traded companies are already obligated by law to disclose financial significant information to investors, the SEC frequently gives more detailed guidelines on how they should address risks posed by major events.