- The surprise move by the SEC doesn’t give more details
- Running nodes will enable the SEC to access key blockchain data
- The news has been received with mixed reactions
The United States Securities and Exchange Commission (SEC) is planning to run Bitcoin and Ethereum nodes with plans to add others soon. The commission says the move is intended to make more effective regulations on digital assets.
Inform Commission Policy
The surprise move by, which did not give further details, was recently published in a notice on the U.S Federal Business Opportunities website, says SEC is asking for quotes from contractors who will run Bitcoin, Ethereum and XRP nodes on its behalf. The notice further says this could include “as many as possible of the following blockchains: Bitcoin Cash, Stellar, Zcash, EOS, NEO and XRP Ledger.” The SEC said:
“The United States Securities and Exchange Commission (SEC), 100 F Street, NE, Washington, DC 20549, intends to procure a commercially available off-the-shelf (COTS) enterprise-wide data subscription for blockchain ledger data to support its efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets.”
Monitoring and Compliance Investigations
According to the SEC, the reason for its latest initiative is to support its efforts in monitoring risk, enhance compliance and inform the commission’s policy on cryptocurrencies. While this may appear to ramp up SEC’s analytics to assist or outsource the commission’s blockchain monitoring and compliance investigations, there is a fear among some quarters that the goals may not be as friendly keeping in mind that SEC has not been especially friendly towards digital currencies.
By running nodes, SEC intends to get access to several key data including hashing algorithms, hashing power, mining difficulty and rewards, transactions quantity and size, coin supply and blockchain size. It’s not yet clear what the commission will use this information for or just how it will use it to influence its regulatory decisions and it’s the reason some insiders believe it might be a way of enforcing compliance or fighting cryptocurrency-related crimes.
SEC’s indecision on important crypto-industry related matters such as Bitcoin ETF applications from VanEck and Bitwise has been a thorn in the flesh of investors while the recent closure of Bittrex in the United States on what is thought to be the country’s stringent rules hasn’t made matters easier.
The news about SEC’s intention to run cryptocurrency nodes has been greeted by mixed feelings with opinion sharply divided between users who see this as a good sign that SEC and the US government are finally embracing crypto and those who think who see it as a harbinger of the government’s enhanced blockchain surveillance. Senior analyst at eToro Mati Greenspan commented on his twitter handle saying:
Never thought I'd see the day.
— Mati Greenspan (@MatiGreenspan) July 30, 2019