Subject: S7-04-23: Webform Comments from Anonymous
From: Anonymous
Affiliation:

Oct. 30, 2023

Regarding file number S7-04-23, Safeguarding Advisory
Client Assets. IA-6240. Your knowledge of what cryptocurrency custody
entails is pitifully inadequate. And it's quite likely that it
always will be, as it's cutting edge technology, and you guys
have problems even accurately posting comment emails to a webpage.
I'm going to try and explain this to you in simple words that you
might understand. When you don't manage to understand them
anyway, it may indicate to you how little business you have regulating
cryptocurrencies and digital assets. 

The words " eye metal security tongue bamboo ignore common foam
rocket" Were used to derive a private key, and a public key at a
position down aways on the most common derivation path used in
Bitcoin. Around $1,000 of value at today's BTC price in unspent
transaction outputs has been allocated to that address. It has been
time locked for 3 years using the CheckLockTimeVerify opcode.

At another point farther down the same derivation path, $500 of value
in today's priced BTC value in unspent transaction outputs has
also been allocated.
Because you are too incompetent in this arena it's very likely
you won't even figure out how to verify that the Bitcoin is where
I just told you it is.

Now I ask you what these phrases have in common with each other.
Dominion and control. Custody. Taxable income. I'll give you the
answer later.

For the record, you'll notice that there were only 9 seed words.
It's recommended to use 12 seed words instead, so now you have to
ask yourself, if the UTXOs at that addresses go from unspent to spent,
was it too few bits of entropy? Or did the custodian lose the keys, or
did he embezzle the funds?

That's what's great about following the laws your colleagues
have made easily understandable for you! I'll give you another
clue, to help you along in your blockchain learning experience. The
$1,000 is at position 2023 in the bip44 derivation path. Now try
finding the $500 you got. Do consider minding your own business and
leaving the hard, cutting edge technology things to people qualified
to handle it.

I hope you've read new IRS and Fincen rules. They might be more
relevant to you than you think.
https://www.federalregister.gov/documents/2023/08/29/2023-17565/gross-proceeds-and-basis-reporting-by-brokers-and-determination-of-amount-realized-and-basis-for#open-commentYou

https://www.federalregister.gov/documents/2023/10/23/2023-23449/proposal-of-special-measure-regarding-convertible-virtual-currency-mixing-as-a-class-of-transactions
By the way, the answer to the question earlier by the way is,
"You just received all 3." Funny one right? You know what,
I'm a generous soul. Here's that address first address was
35p2Aa7ns5GCdJBjubtdC5JgEG6kXcCCsp.

Take good care,
Of my money.

P.S. The comment period was too short.