This is a significant proposal. The costs and difficulties of SEC broker-dealer registrations are simply too much for individuals who may engage in a chance finding or for small firms that may put local businesses together with investors. It is also legally significant (as one may reasonably suspect that violations of the broker-dealer registration requirement are fairly common, at least for small local businesses seeking to raise money). Further, the SEC does not itself remotely have the…

Note that the prohibition applies to derivatives on cryptoassets, not to transactions in the assets themselves.

The issuance of , in combination with the SEC's recent issuance of a in the wake of the financial crisis, signals that the agency is undertaking a more sophisticated analysis of overall market risk. This is a very positive direction for the regulator. It is important that the agency becomes equally sophisticated as to economic issues as it is with respect to purely legal issues, since the law must appropriately flow from, or at least take significant account of, the underlying economics.…

In some respects, the most interesting aspect of Rule 2165, even as it exists now, is that it purports to authorize broker-dealers to decline to follow a customer's instructions as to the customer's assets - even where there is no legislative authority. FINRA and the SEC ought to press Congress or the States to adopt authorizing legislation, so that broker-dealers are not vulnerable to litigation.

In addition, FINRA should require broker-dealers to report all holds put on customer…