Comment Text:
From: Colin Gallagher, Chair, Education Committee, Bitcoin Foundation, and member of Advisory Boards for Lifeboat Foundation, incl. New Money Systems Board -- lifeboat[.]com/ex/bios[.]colin[.]gallagher
To: Commodity Futures Trading Commission, Attention: Office of the Secretary
Regarding: CFTC scheduled discussion of "blockchain/DLT, data standardization and analytics, algorithmic trading, virtual currencies, cyber security, and RegTech" and upcoming Technology Advisory Committee Meeting pertaining to the same.
Note: Requesting Removal of Comment. Please remove my comment sent by my same email earlier today to secretary[@]cftc[.]gov due to that I did not realize at the time you preferred comments be submitted through this webform. The below comment is the same one as submitted previously and the below comment should be retained as my official comment on this matter. Thank you.
Dear Secretary, staff, and hopefully diligent readers,
I do not have much time to comment. I work for an exchange that deals in crypto and fiat, so I do that all day long. I help people in this country and beyond move their money. I am busy, I hope you will read my comments. I have been immersed in crypto since bitcoin first came out, and basically since 2009 I have witnessed and been involved in the potential of decentralized cryptosystems to transform economies. Much ignored in this process, only recently gaining attention in a larger way, is the potential of some cryptosystems, such as but not limited to BTC and BCN, which are built with different algorithms and principles, but which share certain approaches (such as the incorporation of Schnorr ring signatures in the Curve25519 group, an approach shared by both BTC and BCN developers) to actually transform transactions and allow many people each to give very tiny amounts, or microtransactions, as donations to anyone without an intermediary and without bumping into problems caused by high fees inherent in systems such as Visa. When new developments (second layer solutions) such as Lightning have been added to bitcoin, an additional remarkable development is the capacity will soon be present in bitcoin for millions of transactions per second (with Segwit and Lightning), whereas Visa only handled on average 1667 transactions per second, and is only capable of a maximum of 56,000 transactions per second, though it's system would be overwhelmed before that.
This should tell the CFTC to leave bitcoin alone and not attempt to impose regulation on it. However, due to the nature of some sketchy groups, such as proponents of ICOs, most of which are total scams, I would encourage you to regulate ICOs. I would also encourage you to regulate Tether, a system which claims to have parity with the dollar, but does not. It's proponents claim it has "dollar backing" but produce no evidence of their claims. A massive shorting of Tether, and / or someone literally shorting or betting against the Merc while dumping Tether, could cause catastrophic effects in the ecology of exchange systems and the larger economy. Most cryptos make no claim to be backed by or tied somehow to the dollar, but those that do, like Tether, deserve serious regulatory scrutiny.
I also wanted to let you know in my home state of California we have defeated three times, and will continue to defeat, attempts by the CA legislature to impose a bitlicense like they have in NY. We will never become NY and we will fight against ridiculous regulators who try to stifle our innovation, and we will win.
Additionally, we defeated a Congressional proposal, S.1241, basically telling the Administration why nothing like it should ever be approved and why it should be vetoed if ever passed by Congress. Thus far, the message was favorably received.
I also discussed with the Administration by communication to the White House my thoughts on crypto IRAs (bitcoin IRA type arrangements, which involve the use of a trust, a custodian, and frequently companies that manage multisignature aspects of resources), encouraging the Administration not to support a pending proposal in Ways and Means, that threatened to limit what U.S. persons could contribute annually to IRAs. Fortunately, the Administration was supportive of these thoughts as well and following my communications with the Administration, the proposal was abandoned, though I would of course continue to monitor the legislative arena for any possible sneaky reintroduction of it by Congress.
Generally, I oppose all regulation you might propose for cryptos except as explicitly stated above. Hope this helps. Ciao.
