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United States: SEC Looks Toward Blockchain Data Analysis Tool

Originally published on: BTCMANAGER
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February 05, 2019

The US Securities and Exchange Commission (SEC) plans to observe blockchain activity closely in the future. The regulator recently announced on January 31st, 2019, that it wants to work with blockchain analytics providers so that it can closely monitor the most prominent blockchain ledgers in the market. 

The SEC Wants Your Blockchain Data

On January 31, the SEC issued a ‘sources sought announcement’ as a means to conduct research into the best possible blockchain data analysis tools it could potentially acquire to “support the [its] efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets.” 

The SEC’s notice is a call-to-arms for blockchain data providers to reach out to the regulator to help it in its mission to acquire as much data as possible about the most widely used blockchain networks. Specifically, the SEC is looking for data analysis tools that allow for the easy extraction and dissection of blockchain data so that it was be easily reviewed. 

According to the notice, the SEC’s requirements for the data provision include:

  • The provision of data extracts on a recurring basis for the most popular blockchains, based on transaction volume.
  • Cleanse and normalize data to enable review and exploration.
  • Capabilities to derive insights from the available blockchain data, including being able to attribute addresses to real-world individuals or companies. 
  • A means to demonstrate that the data provided is accurate and complete.

Interested data providers can submit their details until February 14. 

Is the SEC Preparing for a Bitcoin ETF?

While cypherpunk-esque bitcoin investors would probably prefer that the US financial regulator does not start snooping around on the blockchain, the decision to look into blockchain data analysis tool suggests not only that the SEC expects for digital assets to become part of the global financial market but it may also suggest that it is preparing to approve a Bitcoin ETF soon.

The main hindrance that prevented the SEC from approving a Bitcoin ETF has been the lack of market surveillance. Perhaps, with newly acquired blockchain analysis tools, the SEC will feel more comfortable with the idea of cryptocurrency-based financial products as they will then be able to analyze on-chain activities as part of their regulatory duties. 

As BTCManager reported on February 2, the CBOE and VanEck have re-applied for a Bitcoin ETF with the SEC in an attempt to finally get a publicly-traded Bitcoin ETF across the finish line. 

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