Tuesday, August 4, 2020

SEC will put magnifying glass on Binance’s blockchain and cryptocurrency

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Key facts:
  • The regulator chose CipherTrace to grant it inspection licenses.

  • The agreement will be for one year, but it can be extended for the next four.

The United States Securities and Exchange Commission (SEC) has plans to analyze Binance’s blockchain and its cryptocurrency Binance Coin (BNB). The regulatory body disclosed through a memorandum that it will hire the intelligence company CipherTrace for the investigation.

According to manifest, the deal is for one year, but extendable for the next four and would become official today July 31. It is unknown if the agreement between both parties has already been signed or what the amount of the negotiation would be.

The reasons that were driving the SEC’s decision to monitor the operations of the network and its crypto asset were not clarified. However, surveillance would be to check whether the platform is complying with anti-money laundering (AML) regulations and potential fraudulent operations.

At this point it should be mentioned that in November last year Binance and CipherTrace reached a agreement for the security firm to analyze your network. Back then it was reported that CipherTrace would provide controls against money laundering and the identification of high-risk addresses.

Now, as a link in the chain, it is the SEC that is hiring CipherTrace to supply it with information on the Binance blockchain based on work it has already done for nine months.

The fact that the SEC executes a review on another review already underway, and with the same company, is an element that attracts attention. From the above it follows that the investigation could have other interests for the commission that include: the network itself, the cryptocurrency or even the Binance DEX market that works on it.

Another aspect to consider is that the SEC considers that the services that CipherTrace offers are the “only ones that have the forensic and risk intelligence tools that can support the Binance currency (BNB) and all the tokens of the Binance network. ».

CipherTrace is a company founded in 2015 by Silicon Valley entrepreneurs. In his first steps received funding from two government organizations United States: The Department of Homeland Security, Science and Technology, and the Defense Advanced Research Projects Agency (Darpa).

The agreement between the SEC and CipherTrace highlights an increasing trend among United States government, regulatory, or defense entities, which have announced deals with ecosystem companies for increased oversight of cryptocurrency operations.

CryptoNews reported two weeks ago that Coinbase and the United States Secret Service They agreed to monitor Bitcoin and cryptocurrency users. This month it was also announced that the American army was receiving proposals to implement a system that would allow them to detect crimes with bitcoin.

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