March 6, 2017
Dear Commissioners,
The SEC's rulemaking authority is both a shield and a sword.
As a shield, it protects lay persons from being misled into wasting their hard-earned money on questionable types of investments. This is why qualified investors (a euphemism for “rich people”), who are presumably more knowledgeable than the rest of us, are permitted to make investments that the rest of us are not.
It's time to recognize, however, that the same rulemaking authority is also a sword that harms the not-so-rich people. People who might want to invest a modest fraction of their earnings into a new technology like bitcoins. People who are bright enough to understand that such a new technology comes with risks but who do not have enough technical knowledge to manage their own bitcoin keys. Or people who do have some technical know-how, but who want to invest before-tax funds and not just after-tax funds into bitcoins.
It's these bright non-technical persons, who already have online stock accounts, who will benefit most from being able to add a small amount of a bitcoin-based security to their existing stock accounts and to their self-managed online IRAs.
The SEC should stop vacillating about a new technology just because it's a new technology, be bold, and allow more of the common people to share in both the potential benefits and perhaps the potential risks of the new and unique technology that is bitcoin. And in the future, this bold step should also extend to other virtual currencies.
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