Jun. 28, 2022
SEC, I oppose the creation of "investment" vehicles for cryptocurrencies of all kinds, and oppose the SEC putting its stamp of approval on any form of so-called "cryptocurrency" investment vehicles. Everything about cryptocurrency is questionable, and exposes investors to risks that almost no one fully appreciates. In particular: * Cryptocurrencies have numerous technical weaknesses in how they're implemented, which has resulted in a steady stream of high-profile losses to speculators on these assets. Companies backing cryptocurrencies have repeatedly failed to perform any sensible due diligence to mitigate the security risks associated with the technology. * There's strong evidence of market manipulation of cryptocurrency dollar valuations, and the underlying market dynamics are driven by actors that are commonly engaging in activities that would be illegal if performed in the stock market under current SEC rules. * Prominent companies (e.g. the Tether stable coin, controlled by Hong Kong company Tether Limited) are essential to supporting the value of cryptocurrency assets, but refuse to subject themselves to third party audits. * Cryptocurrencies are fundamentally not currencies, and deliver essentially none of the functionality their advocates promise, serving only to act as a vehicle for speculative investment not tied to any underlying economic value. * To the extent cryptocurrencies have any utility, it's primarily to enable international cybercrime, money laundering, tax evasion, illegal drug markets, and other illegal/illicit activity. * The industry that has formed around cryptocurrency does not meet basic standards of disclosure to enable investors to understand the risks they are incurring. * Cryptocurrency valuations are fundamentally impacted by the activities of companies operating outside the regulatory oversight of US authorities, and as such any SEC blessing of a cryptocurrency investment vehicle cannot provide the regulatory safety that investors will naturally assume they receive when the SEC permits a particular investment vehicle. For all of these reasons, the SEC should not permit the creation of ETFs wrapping cryptocurrency "assets". -Michael Wolf