The United States Securities and Exchanges Commission (SEC) is planning to run through contractors a bitcoin and an ethereum node, in addition to “as many as possible of the following blockchains: Bitcoin Cash, Stellar, Zcash, EOS, NEO, and XRP Ledger.”
They provide no concrete reason as to why they need to run their own node save for stating it is “to support its efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets.”
They specifically state “the subscription shall source all blockchain data from hosted nodes, rather than providing this data as a secondary source (e.g., via blockchain explorers).”
So suggesting what they’re probably looking for is an analytics company to presumably outsource SEC’s blockchain monitoring and compliance investigations.
They would also like to have data that includes things like “hashing algorithms, hashing power, mining difficulty and rewards, transactions quantity and size, coin supply and blockchain size.”
That sort of data is provided for free by plenty of blockchain explorers, but presumably they want analysis rather than just data as their requirements state the contractor should:
“Demonstrate level of rigor of data cleansing and normalization meets requirements of financial statement audit testing.
If attribution data supplied, describe processes and data sources for blending blockchain data with attribution data points for deriving insights.”
They say all the data from the genesis block onward should be provided in one go, then should be updated daily through some feed and preferably an API method of their choice.
They further want the provider to be able to add new blockchains within a three months notice.
Meaning they’re probably looking to implement on-chain surveillance systems to see or guess who is doing what, with it unclear why bitcoin is included.
As a decentralized and as a permissionless open network, anyone can run a bitcoin node and have access to all the data, but SEC has no jurisdiction over bitcoin.
Activities on the bitcoin blockchain, however, could potentially come within their remit. Ethereum for example raised capital on the bitcoin blockchain prior to launching exactly four years ago.
SEC has stated ethereum is not a security , but it has not yet clarified whether XRP is a security or whether any of the many well known tokens running on ethereum are a security or otherwise.
This system is perhaps being set up precisely so that they can establish whether a token or project is or is not a security, but one would have expected this sort of research some time ago.
In addition therefore this might have something to do with SEC perhaps establishing more lenient frameworks by adapting their policy to account for blockchain’s unique qualities.
That could be very relevant in regards to compliant tokens which might get the green-light from SEC.
With the assistance of this new system, such security tokens might have lower burdens of compliance because many aspects could be automated and auto generated through blockchain analysis.
So the American regulator might perhaps finally be moving a bit, but it’s not clear whether their focus is more on enforcement or on facilitation of capital formation.