- The Securities and Exchange Commission's private investigation into Green, a blockchain organization, led to the collection of the personal data of the miners.
- As per the SEC, the leak of personally identifying information is a violation of privacy laws.
- SEC has been taking heat from Grayscale in the lawsuit for the agency's "harsh and unfair" treatment of Bitcoin spot ETFs.
Securities and Exchange Commission (SEC) has maintained its close watch over the crypto market for years, making sure no mistake goes unnoticed by the regulatory authority. However, at the moment, the watchdog agency is under fire for making a dire mistake, essentially putting hundreds of people at risk.
SEC leaks personal information
According to the Washington Examiner, the SEC leaked the personal information of more than 650 individuals. Although the leak is believed to be unintentional, the majority of those whose data was leaked are miners, putting their anonymity at risk.
As per reports, the Securities and Exchange Commission has been privately investigating a blockchain organization called Green for many years now. This investigation included interviewing many customers of the company who bought products from Green.
The individuals claimed to be cooperative with the SEC. However, following an error in an email from the agency, the names and email addresses of over 650 users were leaked.
The leak of data, even accidentally, is a violation of the Privacy Act of 1974. Per the act, the sharing of information gathered by any federal agency without proper consent is strictly prohibited. SEC, without admitting their fault in regard to the situation, stated,
"Protecting the privacy of all parties is critically important, and the SEC is looking into this matter."
According to the crypto community and the affected individuals, the leak of such personal information puts them at risk. The information leaked is enough for an exploiter to identify the individual and hack the nodes of the miners, eliminating the anonymity that comes with blockchain and crypto.
SEC under fire
Although no action has been taken by Green against SEC at the moment, any move would account for a second instance where the SEC becomes the recipient of a complaint.
Earlier last year, Grayscale filed a lawsuit against the Securities and Exchange Commission for rejecting its application to convert the Grayscale Bitcoin Trust into an ETF.
Per the SEC, this was because spot ETFs were vulnerable to fraud and manipulation, unlike Bitcoin Futures ETFs, which have federal oversight in the form of the Chicago Mercantile Exchange (CME). Pending briefs, the case is set to head for oral arguments over the next few months.
