The U.S. Securities and Exchange Commission (SEC) has signed a deal with analytics firm AnChain.AI to monitor and regulate the decentralised finance (DeFi) sector, according to Forbes.
The initial contract value is $125,000, with five separate annual options at $125,000 each, for a total of $625,000.
“The SEC is very interested in understanding what is happening in the world of smart-contract-based digital assets. Therefore we are providing them with technologies to analyse and track smart contracts,” explained AnChain.AI co-founder and CEO Victor Fang.
The AI and machine-learning startup specialises in tracking illicit transactions on cryptocurrency exchanges, in DeFi protocols and traditional financial institutions.
The combined market capitalisation of DeFi project tokens exceeds $122 billion (CoinGecko), and daily trading volume on the largest decentralised exchange, Uniswap, reaches $1.8 billion. In many trades the coins involved may be securities, and the trading platforms themselves are becoming increasingly sophisticated, Fang noted.
In fact, Uniswap is a “mix of 30,000 individual smart contracts that actually execute token swaps,” he stressed.
In early August, SEC Chair Gary Gensler warned of the tightening of DeFi regulation. Later he stressed that the decentralised nature of the projects does not immunise them from the agency’s oversight.
Earlier, SEC Commissioner Hester Peirce argued that only full decentralisation from launch is the only hope for DeFi projects to avoid regulation.