The US financial regulator, the Securities and Exchange Commission (SEC), has announced it wants blockchain expert firms that can provide it data on the “most widely used” decentralized ledgers, based on transaction volume.
This, according to the regulator, is needed for it to study and “monitor risk and improve compliance” in the cryptocurrency sector. The agency has laid down specific requirements for the information, such as easy readable data, how the information was compiled and the methodology used for extracting transaction details.
The US regulator is known for its tough stance on the legality of cryptocurrencies. However, it has recently announced it will be prioritizing the study of digital assets so that it can counter “concerns related to custody and safekeeping of investor assets, valuation, omitted or misleading disclosures regarding the complexities of the products and technology, and the risks of dramatic price volatility”.
Interested parties, according to the announcement, can respond to SEC by 14 February.
To that effect, SEC has already setup a dedicated department, known has FinHub, that helps financial technology startups to understand and comply with the legalities, especially when it comes to initial coin offerings (ICOs). The SEC has finally realized that many of the startups face immense difficulty in navigating through legal jargon, often making it extremely complex for the organizations to understand what laws are broken. For this, it has announced it will be releasing guidance that will comprise of “plain English”, where any crypto organization can determine if their cryptocurrency falls under the classification of security or not.
The SEC’s interest in studying more about DLTs comes in parallel with Commodity Futures Trading Commission (CFTC), another regulatory body’s December 2017 announcement that it would be looking into Ethereum’s workings to ensure derivative markets are compliant.
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