The U.S. Securities and Exchange Commission (SEC) is issuing a ‘sources sought’ notice. Its objective is to conduct market research to determine the availability and technical capability of large and small businesses to provide blockchain data to support the SEC’s efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets.
The SEC is seeking this information to support a goal of acquiring data for the most widely used blockchain ledgers, including the ‘universe of available information and transaction details’.
SEC required capabilities
The SEC is seeking sources for a data source (subscription) which:
- extracts blockchain data
- parses this data to make it easily reviewable.
The SEC wishes to know and assess not only each potential vendor’s ability to provide data but also an overview of the processes used to:
- extract the data,
- convert the data into a reviewable format
- verification steps (to ensure there is no loss in data completeness and accuracy due to the data transformation tools and processes applied).
The requirements for the data include:
- provision of data extracts on a recurring basis for the most widely used blockchain ledgers,
- based on transaction volume.
- cleansing and normalising of the data to enable review and exploration.
- a capability to derive insights from the data, including attribution data (for example, to whom a
- particular address belongs)
- some means to demonstrate the data provided is accurate and complete.
In addition the SEC is seeking:
- a list of the most widely used blockchain ledgers for which data can be provided
- a description of the ‘universe of data available’ for each provided blockchain
- options for data sharing (for example, transmitted to a client or queried from a vendor)
- a data-transmission option or a data-sharing process (push or pull and method)
- frequency of updates/transmissions
- approximate size of data sets and formats
- for the vendor-query option, the data-sharing process (whether from a website or other source) plus the frequency of data refreshes
- measures to ensure privacy of client-run queries and analysis.
- the processes and tools used for data sourcing and validation of data accuracy and for aggregation and compilation the data
- the processes and tools used, including any assumptions made, to cleanse and normalise data
- the tools recommended or offered to support Graphical User Interface (GUI), data visualisations, and general data use (search and analysis).
- data-use permissions (e.g. enterprise use).
- cost estimates for ongoing access/subscription to the requested data.
Enterprise Times: what does this mean
An important caveat is that, at this stage, the SEC is only looking for information. It expressly states that the SEC:
- is not looking for proposals
- views publication of the solicitation as for information purposes only
- offers no commitment to proceed any further
- expects those preparing submissions do so at their own cost and voluntarily.
Despite the caveats, this demonstrates the SEC knows it must ‘get a handle’ on blockchain/digital ledger technology. Better still, rather than starting from the technology per se, the SEC proposes to look for substantiating data.
Whether it will find what it asks for is the question to which Enterprise Times wishes to know the answer. We guess that failure to proceed to an RFP in the near future would be passive confirmation that the SEC could not find what it wants.
[Those who wish to respond to the SEC should send responses (in the format described) to the email address given here, by email by 3:00 PM Eastern Time on 14 February 2019.]