Nov. 13, 2023
Dear Securities and Exchange Commission, As a passionate and respectful Canadian citizen, I am writing to express my deep concerns about the potential regulation of cryptocurrencies outside of your mandate. I believe that such regulation could have significant constitutional implications, and I urge you to consider these carefully. Exceeding Statutory Authority: The SEC’s power is derived from federal securities laws, which may not cover all cryptocurrencies. By attempting to regulate assets beyond their scope, the SEC could be overstepping its legal boundaries, which I believe is the case and surely will be if this current rules will go ahead as proposed. Separation of Powers: The Constitution establishes a separation of powers among the three branches of government. If the SEC were to regulate cryptocurrencies outside its mandate, it could be seen as an encroachment on the legislative or judicial branch’s authority. Understanding of Staking and Minting: I am concerned that the SEC does not fully understand the intricacies of staking and minting crypto. The regulations are vague and broad, and look to surely regulate decentralized finance tools in a completely inconsistent way. How can one be taxed or regulated on an interest yield that is constantly in flux? Does the SEC have a full inventory of all the types of DEFI and how to regulate them in a consistent approach as they do with stocks and other assets. Crypto is very detailed and nuanced, and so should the rules that regulate them be! Centralized Software: Centralized Software (e.g. DEXs) is inappropriately being captured as an asset or an entity. Should we be considering Facebook groups that trade and exchange used goods and central regulated assets? Code is Free Speech: Hypothetically, let's say I use GitHub to track my crypto assets and wallet seed phrases, which are public. Does this mean that this needs to be regulated by the government as well? What if many people know and share a seed phrase? How can you tax many people simultaneously? The United States is setting standards for crypto regulation around the world, and it has ethical and moral standards to develop such regulation for the betterment of Americans and humanity in general. The ability to operate, transfer, and own money by citizens should not be subject to government interference or undue regulation and oversight as long as that citizen operates within the hue of its local laws. Cryptocurrency is effectively free speech in that cryptocurrency is code, and code that imposes no direct, intentional, or likely harm to other citizens or entities should be allowed to be published and run no different to how I can write and run code to complete my school work. Crypto currency regulation needs to not also stifle innovation and ability to transact freely within the hue of the law. These arguments highlight my potential concerns with the SEC regulating cryptocurrencies outside their mandate and emphasize the importance of a clear legal framework for any regulatory action. I trust that you will take these concerns into consideration as you continue to develop your approach to cryptocurrency regulation. Sincerely, Michael