Based on a statement by a spokesperson from AnChain.AI, a blockchain analytics firm, the company has entered into a $600 000+ contract with the Securities and Exchange Commission (SEC) to enable the regulator to monitor the decentralized finance (DeFi) space.
The contract began in May of 2021 with an initial value of $125,000. Reliable sources say that the amount might escalate to reach $625,000 in case the SEC decides to retain the group for five more $125,000 ‘option’ years. Victor Fang, CEO and co-founder of AnChain.AI said:
“The SEC is very keen on understanding what is happening in the world of smart contract-based digital assets. So we are providing them with technology to analyze and trace smart contracts”.
AnChain is currently focusing on tracking the illegal activity that is happening across the crypto, DeFi, and traditional financial sectors. Besides supporting the SEC in the investigation of suspicious decentralized finance transactions and activity, they are also working with centralized crypto exchanges and fiat institutions to create ‘preventive’ defense to combat predatory actors in the space.
While some of the former SEC members have shown some promise and faith in decentralized finance and cryptocurrency, they also continue to keep an eye out for the bad actors and criminals within the budding space. Earlier in August 2021, SEC’s current commissioner Gary Gensler explained to WallStreet Journal why DeFi and ‘decentralized operations fail to get approval on regulation:
“There’s still a core group of folks that are not only writing the software, like the open-source software, but they often have governance and fees…There’s some incentive structure for those promoters and sponsors in the middle of this.”
The decentralized finance sector is currently handling more than $80 billion worth of digital assets. As the Commission continues with its investigations, most of these assets are likely to be considered to be securities.
SEC’s Continuing Battle With Cryptocurrencies
The SEC has already had its plates while trying to understand, analyze, and eventually regulate crypto and DeFi projects. Just recently, they settled for $12 million in penalties from three promoters of Bitconnect. Bitconnect is majorly known as one of the largest Ponzi schemes that ever existed in the history of the crypto sector.
In the meantime, they are also sieving and sifting through many rising digital assets aiming to determine whether or not these tokens qualify to be securities. Hester Pierce encouraged decentralized finance projects to act proactively in gaining approval from regulators earlier in the year.
“When you start to look at the tokens themselves and try to figure out whether they’re securities, it does get kind of confusing… This is why I encourage individual projects to come in and talk to the SEC because it really does require a look at the very particular facts and circumstances.”