Oct. 14, 2023
To whom it may concern, As an individual who is deeply concerned about the proposed legislation by the SEC regarding cryptocurrency and digital assets, I firmly believe that it represents an overreach by the SEC and could have detrimental effects on the industry. While I understand the need for investor protection and the prevention of fraudulent activities, it is important to consider the potential stifling effect that excessive regulation can have on innovation and growth in this emerging field. First and foremost, it is crucial to recognise that the existing laws and regulations already provide a framework for addressing investor protection and fraudulent activities in the cryptocurrency and digital asset space. The SEC has the authority to regulate securities offerings and exchanges, and it has successfully taken action against fraudulent ICOs and other illicit activities in the past. Therefore, it is unnecessary to introduce additional regulations that may hinder legitimate businesses and impede technological advancements. Furthermore, the proposed legislation fails to take into account the unique characteristics of cryptocurrencies and digital assets. Unlike traditional financial instruments, these assets operate on decentralized networks and are not subject to the same level of control as traditional securities. Imposing stringent custody requirements and auditing provisions on these assets could undermine their fundamental nature and hinder their potential for widespread adoption. Additionally, it is important to consider the potential impact of excessive regulation on small businesses and startups ability to enter and thrive in the cryptocurrency and digital asset space. Startups and small businesses are often the drivers of innovation and technological advancements, and they play a crucial role in fostering competition and diversity within the industry. However, the proposed legislation could create significant barriers to entry for these entities, as they may not have the resources or infrastructure to comply with the stringent requirements imposed by the SEC. Moreover, the proposed legislation could have a chilling effect on investment in the cryptocurrency and digital asset space. Investors may be deterred from participating in this emerging market if they perceive it to be overly regulated and burdensome. This could stifle capital formation and hinder the growth of innovative projects and technologies that have the potential to revolutionize various industries. It is also worth noting that the SEC's approach to regulating cryptocurrencies and digital assets should be consistent with the principles of regulatory clarity and proportionality. The lack of clear guidelines and inconsistent enforcement actions in the past have created uncertainty and hindered the development of a thriving ecosystem. Instead of introducing new regulations, the SEC should focus on providing clear guidance to market participants and ensuring consistent enforcement of existing laws. In conclusion, while investor protection and the prevention of fraudulent activities are important goals, the proposed legislation by the SEC represents an over reach that could stifle innovation, hinder growth, and create unnecessary barriers for small businesses and startups. The existing laws and regulations already provide a framework for addressing investor protection and fraudulent activities in the cryptocurrency and digital asset space. Imposing stringent custody requirements and auditing provisions on these assets could undermine their fundamental nature and hinder their potential for widespread adoption. Furthermore, excessive regulation could deter investors from participating in this emerging market and hinder capital formation. The SEC should prioritise regulatory clarity and consistency in its approach to regulating cryptocurrencies and digital assets. Instead of introducing new regulations, the SEC should focus on providing clear guidance to market participants and ensuring consistent enforcement of existing laws. By doing so, the SEC can strike a balance between investor protection and fostering innovation in this rapidly evolving industry. Kind Regards, Claire Kent Sent with Proton Mail secure email.