US SEC Seeks Blockchain Data Provider to Improve Risk Monitoring and Compliance

The U.S. Securities and Exchange Commission (SEC) is seeking to further “monitor risk and improve compliance” within the crypto industry by leveraging on tools capable of providing Big Data extracted from some of the world’s “most widely used” blockchain networks.

As detailed in a solicitation notice published January 31, the securities regulator is seeking for both small and large-scale companies that may potentially provide data on transaction volume across some of the industry’s leading blockchain ledgers. According to the SEC, the data needs to be rendered in an “easily reviewable” format and should outline how the data is extracted and converted so that there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.” Furthermore, the SEC also aims to identify transaction addresses and other data that may be collected from “the universe of available information.”

Those who may be interested to offer their services may contact the SEC on or before February 14.

The announcement comes as part of the SEC’s broader initiative to prioritize the inspection of digital assets this year, including prevailing issues vis-à-vis the “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.”

In October, the SEC has launched a new division called the Strategic Hub for Innovation and Financial Technology (FinHub) in an effort to make the regulator’s interaction with FinTech startups much easier, while providing pertinent information concerning the industry to help firms navigate the legal implications of their offerings.

In addition, the SEC has also disclosed plans of releasing a “plain English” guideline delineating the classification of digital currencies to help developers define their token offerings.

In December, the Commodity Futures Trading Commission (CFTC) has also indicated plans of studying the Ethereum network, ranging from the technology behind it and how it is employed, in an effort to ensure regulatory compliance of crypto-based derivatives market.