Recently, U.S regulators have turned their sights towards cryptocurrencies. Facebook’s Libra is said to have drawn attention to the entire crypto industry and many fear that strict regulations may be put in place to stifle the growth of digital currencies.
Recent reports show that the U.S SEC is seeking quotes from private contractors to run Ethereum and Bitcoin nodes in its stead. Some other cryptocurrencies in its plan include Zcash, Stellar, EOS, NEO, Bitcoin Cash and XRP. What is the driving force behind this move? Should the crypto community be worried?
XRP (XRP) Price Today – XRP / USD
SEC Plans to Monitor Risk, Inform Commission Policy and Improve Compliance with This Move
The regulatory body stated that they plan to acquire a commercial off-the-shelf enterprise-wide data subscription for the blockchain ledger. This data will allow the SEC to monitor risks, improve compliance while also helping it to create policies on digital assets.
SEC does not want companies who already engage in monitoring and research. It is searching for companies that collect data such as transaction fees, hash rate, blockchain explorers, rewards and mining difficulty.
Some of this data comes at no charge from blockchain explorers like Coinmetrics, Messari Crypto, and Blockchain Info. However, SEC prefers analysis and not just data. Their requirements read:
“Demonstrate level of rigor of data cleansing and normalization meets requirements of financial statement audit testing. If attribution data supplied, describe processes and data sources for blending blockchain data with attribution data points for deriving insights.”
Also, the body requires that all genesis block data should be in one location and updated daily. This may be done through some feed or API method.
The potential provider should be capable of adding new blockchains within 3 months. This implies that the commission may be planning to implement on-chain surveillance system. However, it isn’t clear what this will be for or why Bitcoin is a part of it.
Crypto Community Debate The News
Crypto community members on Twitter debated the implications of the news. Some believe that it is bullish for crypto and may mean that the government will not impose strict regulations on crypto. Others believe that it is a ploy by the government to implement blockchain surveillance and track transactions. This may be unlikely as everyone can access public blockchains. The blockchain is permissionless and decentralized so nothing can be hidden from the public if the government goes ahead to run a node.
This also means that the SEC cannot control the blockchain or Bitcoin. The only thing it can do is observe the actions on the blockchain. Still, this could mean something else. It could mean that the SEC is trying to determine the security status of each network. for instance, Ethereum raised capital on its blockchain before the launch. SEC has already explained that Ethereum is not a security, but XRP’s status is still not settled. Perhaps, the aim of the entire exercise is to detect projects or tokens that are deemed securities.
XRP executives recently sent an open letter to Congress in a bid to change their mindset of cryptocurrencies in general.