SEC targets DeFi projects with deal with analyst firm

The U.S. Securities and Exchange Commission (SEC) has entered into an agreement with a blockchain analytics firm to focus more attention on the decentralized finance (DeFi

) industry. Sponsored Sponsored

Cryptocurrency analytics firm AnChain.AI has signed an agreement with the SEC to provide the regulator with blockchain data and technology to analyze smart contracts.

The contract is worth $125,000 per year according to reports

, with a five-year term worth a total of $625,000. AnChain.AI CEO and co-founder Victor Fang stated:Sponsored Sponsored

The SEC is very keen to understand what’s happening in the world of digital assets based on smart contracts. We provide them with the technology to analyze and track smart contracts.

DeFi regulation coming?

It’s clear that the SEC wants more oversight of the nascent DeFi industry. Speaking to the Wall Street Journal

this month, SEC Chairman Gary Gensler issued a warning. It reads that DeFi projects will not be immune from oversight because they use the word decentralized. He added that some DeFi projects have features that make them similar to the types of entities supervised by the SEC.

SEC Commissioner Hester Peirce has also questioned the status of some tokens traded on DeFi protocols. Earlier this year she said

:

When you start looking at the tokens themselves and trying to figure out if they are securities, it gets a little confusing.

San Jose-based AnChain.AI uses artificial intelligence and machine learning to track illegal activity on cryptocurrency exchanges, DeFi protocols and traditional finance. In an Aug. 28 tweet

, the company stated:

We are proud to work with the SEC to protect all crypto stakeholders in the virtual asset economy and bring our technology to critical regulatory oversight efforts.

Victor Fang confirmed the complexity of the DeFi scene using the example of the world’s largest automated market maker, Uniswap. He stated that Uniswap DEX

, which was the first to generate $1 billion in fees, is actually an amalgamation of 30,000 separate smart contracts that execute the actual token exchange.

AnChain.AI has also developed a predictive engine that can

That identify potentially suspicious unknown addresses and transactions.

Perspectives on Total Value Locking (TVL)

The increased focus on DeFi by U.S. financial regulators is partly due to the fact that it has grown 450% this year alone. According to DappRadar, the total value of blocked funds across all protocols listed is now $121 billion.

Collateral lockup reached a record high of $146 billion on May 12 and appears to be on track to reach a new peak before the end of the year.

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