PANews reported on August 24 that according to The Block, the Blockchain Association and the DeFi Education Fund stated that the newly operated database of the U.S. Securities and Exchange Commission poses concerns about the privacy of millions of people and may trap digital assets.

In the wake of the financial crisis, the SEC passed Rule 613 in 2012 requiring national securities exchanges and the Financial Industry Regulatory Authority to maintain a comprehensive audit trail (CAT). Former SEC Chairman Jay Clayton said in 2017 that the goal was to allow regulators to oversee securities markets in an “integrated” way. The comprehensive audit trail will be fully operational by the end of May 2024, according to the Securities Industry and Financial Markets Association.

The 351-page rule does not explicitly mention digital assets, but both cryptocurrency groups said the SEC considers many cryptocurrency participants to be exchanges or brokers, and therefore they must report information to the CAT. In an amicus brief filed Thursday, the groups said the CAT would turn “the blockchain into a vast and completely de-anonymized repository that the government can search at will without having to show any probable cause to obtain a warrant.” “Due to the nature of blockchain technology, access to even a ostensibly limited identity record could unlock a vast array of unrelated financial transactions conducted by that user in the past, present, and future, all of which would be subject to inspection by the federal government and numerous private parties,” they said in the brief.