The DeFi Training Fund and the Blockchain Association bask in submitted an amicus temporary in improve of a steady field in opposition to the Securities and Alternate Commission’s (SEC) Consolidated Audit Trot (CAT).
The temporary highlighted important privateness and security concerns posed by the CAT, particularly for members within the digital asset market, and argued that it must moreover potentially erode financial privateness.
The two organizations bask in previously filed the same briefs in opposition to diverse regulatory considerations, alongside with placing off airdrops from the SEC’s securities classification.
Consolidated Audit Trot
The CAT, operational since April, represents the finest government-mandated sequence of non-public financial files in US history. It goals to create a centralized database tracking all securities trades all over US markets.
This database might perchance be accessible to SEC regulators and thousands of private workers members with out a warrant or doable cause. Critics argue that this stage of obtain admission to raises important privateness considerations, especially within the context of an increasing selection of sensitive financial files.
The NCLA, which initiated the lawsuit in April, argues that the SEC has overstepped its regulatory authority with the appearance of the CAT. The case has attracted over 50 amicus curiae briefs, reflecting frequent field all around the financial and crypto sectors.
Uncommon dangers
The temporary argues that the CAT poses unfamiliar dangers for digital asset transactions. The SEC’s problem that many digital asset market members qualify as exchanges, brokers, or dealers might perchance moreover field these entities to the CAT’s wide reporting requirements.
This might perchance per chance moreover end result within the linking of personally identifiable files with blockchain pockets addresses, exposing users’ transaction histories to unparalleled scrutiny. This form of prospect has raised alarms about attainable overreach and the erosion of financial privateness.
Laura Sanders, coverage counsel on the Blockchain Association, emphasized the broader implications of the CAT, pointing out:
“The CAT program’s sweeping surveillance of non-public financial files, alongside with potentially sensitive blockchain transactions, is a important overreach that threatens to normalize invasive government oversight.”
Moreover, the CAT’s huge scope moreover creates important security concerns. With sensitive files from thousands and thousands of transactions centralized in a single database, the CAT might perchance moreover change into a high purpose for cyberattacks.
This risk is compounded by the selection of participants with obtain admission to to the machine, additional heightening fears concerning the skill for files breaches that will per chance perchance moreover compromise each and each venerable financial files and blockchain transaction files.
