Blockchain Advocates File Amicus Brief Against SEC Audit Program

• Crypto advocates challenge SEC’s CAT program over privacy concerns.
• SEC’s CAT could link personal info to blockchain wallets, sparking a legal battle.
• Potential Gensler nomination as Treasury Secretary stirs political discussion

The Blockchain Association and DeFi Education Fund filed an amicus brief against the Securities and Exchange Commission’s Consolidated Audit Trail (CAT) program, which aims to create a comprehensive database of all US securities trades.

1/ Today, we, along with @fund_defi, filed an amicus brief supporting a challenge to the SEC’s Consolidated Audit Trail – or CAT – program, highlighting the unprecedented privacy concerns raised by CAT. pic.twitter.com/na4CzB0BDG

— Blockchain Association (@BlockchainAssn) August 22, 2024

The filing focuses on privacy concerns for digital asset transactions, which the SEC often classifies as brokerages or exchanges. The legal action aims to challenge the potential link between personal information and blockchain wallet addresses, a level of financial surveillance unprecedented in the digital era.

Privacy Risks Highlighted by Crypto Advocates

CAT’s architecture is designed to enhance regulatory oversight by compiling detailed transaction data. However, the Blockchain Association and the DeFi Education Fund argue this could result in a massive, fully deanonymized repository of user information accessible to the government without stringent judicial oversight. They stress that such extensive data collection could expose users to risks of surveillance that could violate constitutional privacy protections.

Amanda Tuminelli, Chief Legal Officer at the DeFi Education Fund, expressed serious concerns about the implications of the CAT collecting personally identifiable information linked to specific transactions and wallet addresses. She noted the potential for significant privacy breaches, exacerbated by the rising trend in data breaches despite increased spending on cybersecurity measures.

Today @fund_defi and the @blockchainassn filed an amicus brief in support of a challenge to the SEC’s Consolidated Audit Trail (CAT), arguing that the CAT, especially when it pertains to the digital asset sector, “unacceptably undermines privacy and personal freedom.” 🧵…

— Amanda Tuminelli (@amandatums) August 22, 2024

Ongoing Legal and Regulatory Scrutiny

The SEC has maintained a rigorous stance on digital assets, which is evident from numerous enforcement actions against prominent crypto firms like Coinbase and Kraken, alleging operations as unregistered exchanges or brokers.

In related news, Democratic presidential candidate Kamala Harris is allegedly considering current SEC Chairman Gary Gensler for the position of Treasury Secretary if she wins the November election. Several senior Senate staffers reported that Gensler has not publicly addressed this discussion. Still, it has sparked reactions among key political figures, reflecting the intertwining of regulatory leadership and broader financial policy considerations.

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