european-commission-prepares-surveillance-system-for-ethereum

European Commission prepares surveillance system for Ethereum

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The old war between cryptocurrencies and regulators continues. A recent and worrying update came from the European Commission, which appears to be preparing to create a surveillance system for Ethereum, more specifically in decentralized finance (DeFi) applications.

European Commission regulators are trying to develop an infrastructure focused on monitoring the decentralized finance (DeFi) sector, with tools to observe and track activities on the blockchain of Ethereum.

Apparently, the Commission is in the process of requesting studies on this infrastructure, as indicated by Patrick Hansen, director of EU strategy and policy at Circle, who explained on his Twitter account that the commission asked for public participation for a study on automated “embedded supervision” in the DeFi sector.

“The EU Commission has launched a public call for a study on a proposed ’embedded supervision’ of DeFi on Ethereum.

The Objetiv the aim is to study the technological capabilities for automated real-time supervision of DeFi activity. Estimated value of the proposal is 250 thousand euros.”

The EU Commission has launched a public call for tender for a study on “embedded supervision” of #DeFi on #Ethereum.

The aim is to study technology. capabilities for automated supervisory monitoring of real-time DeFi activity.

Est. tender value: 250k EUR.https://t.co/oZwb9QnLjG

— Patrick Hansen (@ paddi_hansen) October , 2022

Hansen added that the EU commission is particularly interested in DeFi oversight on Ethereum, the second largest blockchain in the world and where the most DeFi traffic is, with a “total value” over US$ 31 billion.

Real-time monitoring

The EU Commission study will focus on real-time monitoring of Defi operations on the blockchain, designing an automated data collection system to help determine a regulatory infrastructure

In addition to the amount of 250 thousand euros, the projection is that the pilot project can last for at least least six months, after which the efficiency and data collected by the program will be analyzed.

Hansen also stated that progress with the pilot could reinforce regulatory oversight and allow relevant agencies to seamlessly monitor whether DeFi-linked entities are performing due compliance2022 ).

“This could be quite impactful as the ability of regulators to automatically monitor the public blockchain could drastically reduce the need for market participants (DAOs) ) to verify, collect and deliver data to the authorities”

This could be quite impactful, as the capability of regulatory bodies to automatically monitor compliance by reading public blockchain data could drastically reduce the need for market participants (eg DAOs) to actively collect, verify & deliver data to authorities.

— Patrick Hansen (@paddi_hansen) October 31, 2022 )

It remains to be seen how the pilot will be developed and how much this will impact DeFi’s favoritism among those who do not want their transactions disclosed to the government.