Jul. 21, 2023
Dear Sir/Madam, I hope this message finds you well. As we all know, participants in the financial system employ highly skilled professionals and utilize sophisticated computer systems and networks that connect to numerous official and non-official exchanges, including cryptocurrency and off-book digital asset swaps. Regarding the Reporting Threshold Amount memorandum, which currently sets the smallest reported swap value at $70 USD, I strongly advocate for maintaining transparency and fairness in the financial market. Therefore, I propose that there should be no minimum requirement for reporting any asset or debt-based swap or position. All transactions, regardless of their value, should be reported and disclosed in a transparent manner. It is crucial that daily reporting of all positions is mandated by law to be submitted automatically on a daily basis. Ownership of positions by parent companies or subsidiary entities should not exempt them from the obligation to report asset, swap, or debt positions daily. Both traditional assets and digital asset positions must be reported without exceptions. Any position with a monetary value, whether positive or negative, should be reported separately to indicate both long and short positions, preventing loopholes or technicalities used to conceal high-risk assets within zero-balanced positions or subsidiary companies. The practice of exploiting so-called "offshore safe haven" countries with questionable reporting and fraud/securities laws must be addressed. Any change in position size, positive or negative, should be automatically reported by the end of the business day. Considering the extensive automation in the financial industry through computer systems, high-speed trading, and networks, EDGAR filings should have been required at the end of each business day long ago. Complaints about processing time should be addressed by prioritizing the implementation of new features in automated systems, rather than relying on human labor. Financial participants, who earn substantial profits annually, should bear the responsibility of abiding by the law and implementing necessary computer code, rather than opting for fines for malpractice. A strict stance against non-reporting of financial assets, whether positive or negative, traditional or digital, is necessary. All positions should be reported separately per legal entity/owner, without any exceptions. To enhance transparency and fairness for all market participants, this reporting rule should be implemented without a threshold and require reporting at the end of any business day when a position was opened, modified, or closed. Furthermore, penalties for violating these rules should be significantly increased to discourage non-compliance. Penalties should be proportionate to the value of the unreported position, and the information on violations and their corresponding penalties should be made publicly accessible. This will foster trust within the financial system and ensure that participants can engage in business with trustworthy intermediaries or partners, ultimately rebuilding trust in the market. I urge the commission to use this opportunity to promote transparency and fairness within the financial system, not only within the United States but also by guiding and assisting other countries' financial system regulators in creating more transparent and fair markets. Best regards, Michael Gilbert