Jun. 17, 2021
Dear SEC, I would like to express grave concern over the implementation and integration of any market related securities that are tied to the crypto-currency market, including but not limited to any of the CBOBZX exchange funds or any related plan to integrate securities tied to the crypto market in traditional financial exchanges. CRYPTO MARKET IS NOT A TRADITIONAL MARKET As you all know, crypto currency exchanges are not regulated and overseen anywhere near to the degree of traditional banks, financial institutions and other market exchanges. In many cases, we do not even know who the principals are running these crypto operations, where they're located, or who else they're doing business with? Mingling a well-regulated traditional marketplace with such a volatile, crime-ridden speculative, high-risk marketplace with very little accountability is a recipe for disaster, and can undermine the credibility of traditional markets and regulators. Ironically, one talking point for crypto is its ability to bypass traditional regulation. It's a point of pride that they're not subject to centralized oversight. This is analogous to Amazon allowing burglars to set up their own online store in their marketplace. THERE IS NO SOLID EVIDENCE THE MARKET IS ACTUALLY SOLVENT Furthermore, in light of this oversight, there are SERIOUS CONCERNS regarding ACCOUNTING and LIQUIDITY in the crypto marketplace. As of this writing, just as one example (of many) there is more than US$56 Billion in one stablecoin, USDT (Tether) in active circulation within all the top crypto exchanges, involved in market manipulation of all the other crypto securities. There is NO ACTUAL EVIDENCE that this so-called "stable coin" has adequate backing. Its owners have refused to conduct a formal audit, even after being sued by the New York Attorney General's office, and have admitted less than 3% is actually cash-backed, and none of these claims are verifiable by any independent entities. The amount of trading with these so-called "stable coins" is one of the primary forces maintaining the market's stability, continuing to "pump" the price of Bitcoin, Ethereum and other cryptocurrencies. Nobody really knows how much actual liquidity is in the marketplace. Many experts believe at some point this will cause a catastrophic implosion, not unlike the bank runs in the early days of America prior to Glass-Steagall restricting financial institutions' ability to engage in risky business. CRYPTO CURRENCY AS AN "INVESTMENT" IS A PONZI SCHEME The de-facto definition of a Ponzi is a scheme that relies on continued recruitment of new clients to pay the gains of previous clients. This is the exact model of all major crypto currencies. Unlike stocks, they do not represent any fractional ownership in anything tangible, that can create value or has assets or income. Therefore the only way to profit is by selling your crypto to a "greater fool" who comes in later at a higher price. This business model is 100% mathematically un-sustainable. Since these securities do not have the potential to create any other value, in order to sustain the market, prices must continually go up, but this is not possible indefinitely. At some point, the market will plateau and then collapse as more people try to extract value and find the liquidity isn't there. CRYPTO'S UNDERLYING TECHNOLOGY IS INFERIOR TO EXISTING TECHNOLOGY BY EVERY MEASUREABLE METRIC Crypto enthusiasts suggest Bitcoin, Ethereum, "smart contracts", "NFSs", etc., are "the future." But if you ask them to explain what their new technology does that's better, they often enshroud their arguments in a bunch of meaningless techno-babble that also assumes falsehoods like "government/regulation is evil" and "fiat inflation will destroy everybody's lives." Respected economist Paul Krugman recently stated in a New York Times article, "First, crypto boosters are very good at technobabble using arcane terminology to convince themselves and others that they're offering a revolutionary new technology, even though blockchain is actually pretty elderly by infotech standards and has yet to find any compelling uses... But I've been in numerous meetings with enthusiasts for cryptocurrency and/or blockchain, the concept that underlies it. In such meetings I and others always ask, as politely as we can: "What problem does this technology solve? What does it do that other, much cheaper and easier-to-use technologies can't do just as well or better?" I still haven't heard a clear answer." SUMMARY The existing crypto currency market is little more than an outlet for criminals, money launderers and scammers to exchange value, and entice uninformed citizens that there's a chance they can "get rich quick" by buying into the Ponzi. For every dollar one supposedly earns in crypto, another customer has to lose that dollar. Value is created no other way than by keeping this constant recruitment going. These financial instruments don't contribute to any problem solving or technological advancements. They are merely schemes to milk unsuspecting people out of money. It's not a question of "if" the market will collapse, but "when." References: https://www.nytimes.com/2021/05/20/opinion/cryptocurrency-bitcoin.html https://reddit.com/r/CryptoReality/comments/lq6xpq/the_defacto_list_of_cryptocurrencyblockchain/ https://reddit.com/r/CryptoReality/