Apr. 14, 2023
Thank you for this opportunity to comment on this proposal. After carefully reviewing the reopened proposal there seems to some confusion at the commission regarding their jurisdiction and authority. They have neither the jurisdiction or authority to classify “DeFi” systems as a regulated exchange. The SEC should focus on centralized parties that present counterparty risk. DeFi systems are open source software that are protected by free speech per the constitution. It is a mechanism that buyers and sellers can connect to exchange digital assets with no central counterparty. It is no different than two private citizens meeting in person to exchange items. The SEC has no authority over these types of interactions. Additionally the SEC is making a bold claim that all these assets are investment contracts yet has provided no evidence of such. They make this radical claim to attempt to bring this asset category under their umbrella. There are other government agencies such as the CTFC whom have also laid claim to a subset of these digital assets so we clearly have a disorganized regulation arm whom can’t even agree amongst themselves. The digital asset market class is less than 1% of the other markets it oversees. They should keep a laser focus on the criminality and fraud happening in their “well regulated” markets. Perhaps the SEC should evaluate whether they are technologically competent to even comprehend beginning to evaluate these new asset class types. For example can the SEC discern between a utility token that gets burned as apart of a protocol fee for consuming network resources and a security issued by a company? These are two very different things and to suggest they should fall under the same regulatory scope os a testament to the SECs immaturity in a new space. I recommend taking some basic online courses to understand blockchain technologies and “DeFi”. It will become very clear that you are completely out of your wheelhouse and the proposed classification of DeFi regulation will be obviously incorrect after you’ve done a ounce of research. Has anybody at the SEC set up crypto wallets or performed a trade on DeFI? The SEC needs to focus on COMPANIES, CENTRAL COUNTERPARTIES. Decentralized systems are not in the SECs scope and mandate. Such proposals are ludacris, unenforceable, and frankly a waste of taxpayers dollars. The SEC needs to educate itself. Insane proposals such as this will be met with great friction and the SEC can expect to lose all credibility and respect. Household investors already cannot rely on SEC for any protection since they have been captured by Wallstreet corporate interests and lick the boots of firms such as Citadel, Virtu, Apex. The SEC has demonstrated collusion surrounding events such as MMTLP and have exhibited behaviors that would suggest the SEC is a corrupt government agency. Recently FOIA has revealed they colluded with FINRA and knowingly allowed market makers to list a fraudulent security (MMTLP spinoff) and leveraged a U3 halt to prevent short sellers from having to cover their naked short positions in this fraudulently listed security The SEC should consider transparency above all else. If I had the displeasure of working at the SEC with the amount of fraud being on display to the American public I would be absolutely disgusted with myself, than to propose such ridiculous things as coming after DeFi when the amount of fraud and corruption in your regular markets is so high is absolutely disgraceful. Crypto Markets and Defi are open and competitive by design. With the USD in decline and the US debt climbing to untold heights the fear from the US corporate government is understandable. Being on the decline as the world superpower must be tough. Crypto and DeFi is the obvious exit door for many Americans. But alas you are powerless to stop it. And that’s by design. Just to wrap up, stay in your lane. Your fraudulent corrupt lane, and don’t attempt to classify things you know nothing about.