Emerging Technologies Law is a blog by William Ting which examines 21st century legal, business & Social tech issues.

U.S. SEC Defines "Blockchain"

U.S. SEC Defines "Blockchain"

 SEC's definition of "blockchain" (Getty Images license)

SEC's definition of "blockchain" (Getty Images license)

In a recent complaint filed against an ICO issuer, the US SEC defined the term "blockchain" in footnote 2 of page 7 as follows. As the world's first regulator to do so, did the SEC get it right?

 "A blockchain is a type of distributed ledger, or peer-to-peer database spread across a network, that records all transactions in the network in theoretically unchangeable, digitally- recorded data packages called blocks. Each block contains a batch of records of transactions, including a timestamp and a reference to the previous block, linking the blocks together in a chain. The system relies on cryptographic techniques for secure recording of transactions. A blockchain can be shared and accessed by anyone with appropriate permissions. The Bitcoin blockchain is an example of a “non-permissioned,” or public and open access blockchain. Anyone can download the Bitcoin open-source software and join. All participants share a single view of the Bitcoin blockchain, which is updated when Bitcoin network participants reach a consensus on the validity of transactions under review. “Permissioned” or private blockchains are modifications to that model and require permissioned servers to be approved to participate on the network or to access particular information on the blockchain. Blockchains or distributed ledgers can also record what are called smart contracts, which essentially are computer programs designed to execute the terms of a contract when certain triggering conditions are met."

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