US SEC to Utilize Blockchain Analysis Tools For More Transparency

In the US, a large part of crypto enthusiasts is keenly waiting for approval from the regulators for Bitcoin ETF. On the other hand, the financial regulators seem more focussed on transparency and security.

The United States Securities and Exchange Commission (SEC) has released a statement on Jan. 31. It says that SEC is looking for the firms which can serve as an analyzing tool for Blockchain data. The SEC seeks to identify the owners of wallet addresses for multiple cryptocurrencies. SEC requires a service that can derive insights from available data, including attribution data. Using the attribution data, SEC will know to whom a particular address belongs.

The agency has decided this move in order to improve its risk monitoring and compliance enforcement activity. The SEC has issued a ‘sources sought notice.’ The notice states,

“The SEC is seeking information for potential sources to support the goal of acquiring data for the most widely used blockchain ledgers, including the universe of available information and transaction details.”

With that, last month, the agency expressed that digital assets are one of its top priorities for examination in this year. The recently issued notice consolidates that declaration by SEC.

The SEC requires some more quality in its desired blockchain analytics firm. One of them is to provide cleaned and normalized data to enable review and exploration. Also, it demands accurate and thoroughly demonstrated data. The SEC also requires a verification method that can be used to confirm no data loss in the information. Moreover, the SEC also requests information regarding an overview of the data extraction and conversion.

Further, in the document, the US SEC asks the firms to send their response through email by Feb. 14. The interested firms should contain brief capabilities that are mentioned above. With that, the SEC is planning to bring more transparency to the crypto market. Although, this step can make many cryptocurrency investors feel a bit uneasy.

Apart from that, back in August 2018, an agent of the U.S. Drug Enforcement Administration (DEA), Lilita Infante said that even though privacy-focused cryptos are less identified then Bitcoin (BTC), the agency can still track them. She noted,

“The blockchain actually gives us a lot of tools to be able to identify people. I actually want them to keep using them [cryptocurrencies].”