Number of Blockchain-Related Mentions in SEC Documents is Growing

According to Forbes, in reference to a report by Sentieo, a financial research platform, US companies are showing an increased interest in blockchain technology and cryptocurrencies, as is evident by the number of blockchain related mentions processed by the U.S. Securities and Exchange Commission in 2017.

Year to date, the US regulator has registered over 1,500 mentions which relate to distributed ledger technology, most of which refer to filings, press releases, and transcripts. This is already 65% above the total figure of 2016, while three months are still left until the end of this year.

The increase this year was aggressive, after moderate growth since 2014, when market participants were more focused on Bitcoin as a form of digital currency rather than the blockchain technology behind it. Today, the trends are changing since companies value the potential applications of a distributed ledger.

However, despite the rapid growth, the total number of disclosures is still low considering the huge network of communications between these companies. If we refer to the SEC filings alone, there have been only 309 blockchain-related filings this year, which looks insignificant even when compared to the total number of daily SEC filings. For instance, on October 5, over 6,000 filings were recorded by the US regulator.

“When you consider the potentially hundreds of thousands of documents filed every year with the SEC, the number of blockchain and bitcoin references is still very weak in the grand scheme of things. We’re hearing a lot of noise, but firms aren’t yet acknowledging that this is something imminently important on their official documents with the SEC.”

Another aspect of the Sentieo analysis is that blockchain-related events can make companies more attractive in the eyes of investors. One example is the stock price of Overstock, which went up by 30% on the news that tZERO, its blockchain subsidiary, would start a cryptocurrency trading platform compliant with SEC and FINRA rules.

After the Nasdaq revealed that it was seriously considering the blockchain for different applications, the technology received additional support.

Still, the low number of filings registered by the SEC shows how an emerging market meets a strongly regulated environment. Essaegh says:

“This type of query shows you how certain developments penetrate the markets, for example how things like cryptocurrencies and blockchain move from buzzwords into actual products.”

The regulator remains reluctant to approve cryptocurrency-related applications. Recently, REX LLC also withdrew its SEC applications to launch two Bitcoin ETFs.