Oct. 29, 2023
There are a few potential dangers that this proposed SEC rule change to S7–04–23 could pose to individual freedom with regards to cryptocurrency assets: Increased regulatory oversight and reporting requirements could infringe on the decentralized, anonymous nature of cryptocurrencies that many proponents value. Some may see this as an invasion of privacy or limiting freedom. Requiring advisors to reconcile statements with US GAAP could be burdensome for individual holders of crypto assets, as accounting for cryptocurrencies is still an evolving landscape. This could restrict what cryptocurrencies individuals feel comfortable holding. The auditing requirements could lead to prohibitive costs for small investors or individual holders of cryptocurrencies in pooled investment vehicles. This may limit access or participation. Notification requirements giving the SEC power to receive information about account terminations or modified opinions could be seen as an overreach of authority by the SEC into individual crypto holdings. There are concerns that increased regulation and reporting requirements could restrict innovation in the cryptocurrency space that has benefited many individuals. This could limit freedom and creativity. Some argue that voluntary regulation and limited government oversight have been keys to cryptocurrency's growth. Increased SEC rules may undermine those principles and individual freedoms. Overall, while designed to protect investors, the proposed rules could raise concerns about privacy, overreach, costs, and limiting the freedoms that have made cryptocurrencies appealing to many individuals.