SEC Seeking 'Smart Contract' Tracing Tool That Can Spot Security Vulnerabilities

The federal securities watchdog has taken an interest in DeFi's most basic building block.

Aug 4, 2020 at 6:19 p.m. UTC
Updated Sep 14, 2021 at 9:40 a.m. UTC

The U.S. Securities and Exchange Commission (SEC) wants to procure a blockchain forensics tool that can analyze smart contracts and, preferably, highlight their security issues.

  • Issuing a "DLT Smart Contract Analysis Tool" solicitation request on July 30, the SEC signaled its newfound interest in actively monitoring the code-based blockchain contracts at the foundation of Decentralized Finance (DeFi).
  • SEC wants a tool that can identify: contract purpose, token type, purchase and sale restrictions, address whitelists and blacklists, modifications and contract calls, according to documents reviewed by CoinDesk.
  • Preferably, the tool will also "include the capability to analyze smart contracts for security issues and vulnerabilities," the SEC said in documents accompanying the request.
  • Comparative analysis between different smart contracts would also be a plus, SEC said. Private-sector software vendors have until Aug. 13 to pitch the watchdog.
  • Bloomberg Law first reported the SEC's interest in a smart contract tool.
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