Oct. 14, 2023
Here is a draft response commenting that regulating crypto trading between individuals is nonsensical: Dear SEC, I am writing to express my concern about potential regulations on peer-to-peer crypto trading. Treating individual crypto traders as "brokers" and requiring them to register with the SEC makes no practical sense. Trading bitcoin or ethereum between two individuals is no different than trading pokemon cards, vintage cars, or other collectible items between hobbyists. Just as the SEC doesn't regulate garage sales or collectors exchanging sports memorabilia, crypto enthusiasts trading digital assets in a personal capacity should not be subject to broker-dealer registration. Requiring individual crypto traders to verify the identity of counter-parties, keep detailed records, and submit suspicious activity reports would be completely impractical. These burdensome requirements would stamp out peer-to-peer crypto trading when no consumer protection is needed. Sophisticated institutional crypto trading firms should certainly be expected to register and comply with regulations. But applying securities law to casual individual trading is nonsensical overreach. I urge the SEC to carefully tailor any crypto trading rules to avoid absurd outcomes that serve no public good. Individuals trading crypto as a hobby pose no systemic risks. The SEC should focus its limited resources on meaningful oversight of large players, not ordinary retail traders. I hope you reconsider this overbroad approach. Sincerely, Daniel