Regulatory Action! SEC Signs Contract with Blockchain Analytics Firm to Track Binance Chain Transaction Details

After halting the second largest ICO project in history, "Telegram," the U.S. Securities and Exchange Commission (SEC) has shifted its focus to the leader in the cryptocurrency exchange market, "Binance." The SEC will be signing a contract with blockchain analytics firm CipherTrace to track the on-chain transaction details of Binance's own public blockchain, "Binance Chain."

Exclusive Partnership with CipherTrace

The SEC announced in a contract notice on Wednesday that CipherTrace is the exclusive provider supporting Binance Chain and all tokens on its chain, including the popular Binance Coin (BNB), as an analytics firm capable of meeting the SEC's requirements, and will be directly awarded the contract.

The contract is expected to take effect today, but if CipherTrace does not respond to the request, the contract will expire after 15 days (August 14). The contract is expected to last for one year, but the SEC did not disclose the total value of the contract.

In March 2018, Binance announced the launch of its own public chain, and Binance Chain mainnet officially went live in April the following year. Binance claimed to focus on building a top decentralized exchange with emphasis on performance, ease of use, and liquidity. However, the Binance Chain code is not open-source, and the verification nodes are controlled by Binance. Despite claiming to be a public chain, the mechanism is more akin to a consortium chain.

Additionally, on the 17th of this month, it was reported that Binance Chain introduced a new token protocol called "BEP8," which is said to be suitable for small projects, intellectual property, and small-scale token economy applications. Furthermore, the Binance Smart Chain went live on the testnet on May 30, and the mainnet is set to launch in the third quarter.

Previous Collaboration between Binance and CipherTrace

In fact, as early as April last year, Binance had entered into a strategic partnership with CipherTrace to track on-chain funds, suspicious user wallet addresses, high-risk transactions, and strengthen anti-money laundering (AML) regulatory compliance through its review mechanism.

Furthermore, in November last year, Binance also announced that it would use CipherTrace to track on-chain data of Binance Chain for the purpose of enhancing anti-money laundering (AML) measures. CipherTrace CEO Dave Jevans stated at the time:

Global regulatory agencies need better transparency, security, and compliance, which will maintain the long-term partnership between institutions.