DeFi Education Fund And Blockchain Association Challenge SEC's CAT Database

According to Cointelegraph, the DeFi Education Fund and the Blockchain Association have jointly filed an amicus brief in a case against the United States Securities and Exchange Commission (SEC), its chairman Gary Gensler, and the Consolidated Audit Trail (CAT). The case, brought by two individuals and the New Civil Liberties Alliance (NCLA), does not directly mention cryptocurrency or blockchain. However, the organizations argue that the CAT could negatively impact crypto users. The CAT, a database proposed in 2010 and operational since April, tracks orders throughout their life cycle and identifies the broker-dealers handling them. This allows regulators to efficiently monitor activity in Eligible Securities across U.S. markets. The SEC proposed the rule creating the CAT in 2010, passing it in 2012. Funded by the Financial Industry Regulatory Authority (FINRA) and 26 national securities exchanges, the CAT has raised concerns about privacy and government overreach. The NCLA's class-action complaint challenges the SEC's authority, describing the CAT as a tool for dystopian surveillance and suspicionless seizures. The NCLA filed its suit in April, attracting over 50 amicus curiae briefs. The DeFi Education Fund and the Blockchain Association argue that the CAT exposes more information about investors using blockchains than intended, due to the transparent nature of public blockchains. They claim the CAT connects personally identifying information with wallet addresses, revealing all blockchain-based user transactions. This means anyone with access to the CAT could see not just a person’s securities transactions but all their blockchain transactions. The CAT has also faced criticism as a security risk, described as a