Oct. 14, 2023
Dear sir or madam, As a concerned citizen and advocate for the cryptocurrency and digital asset community, I strongly oppose the proposal "Safeguarding Advisory Client Assets; Reopening of Comment Period" by the Securities and Exchange Commission (SEC). While I understand the importance of investor protections, I believe that the SEC is overreaching in its regulation of cryptocurrency and digital assets, which could stifle innovation and hinder the growth of this emerging industry. Firstly, it is crucial to recognize that cryptocurrencies and digital assets operate in a unique and decentralized manner. Unlike traditional financial systems, these assets are not controlled by any central authority. Therefore, applying traditional custody rules to these assets may not be appropriate or effective. The SEC should consider the distinct characteristics of cryptocurrencies and digital assets when formulating regulations, rather than attempting to fit them into existing frameworks. Furthermore, the SEC's proposed rule fails to acknowledge the existing legal framework surrounding cryptocurrencies and digital assets. The SEC's jurisdiction is primarily focused on securities, and it has already provided guidance on the classification of certain cryptocurrencies as securities. However, many cryptocurrencies do not fall under this classification and should not be subject to the same regulatory requirements. It is essential for the SEC to recognize and respect the legal distinctions between different types of digital assets. Additionally, the SEC's proposed rule could have unintended consequences for the cryptocurrency and digital asset industry. By imposing stringent custody and safeguarding requirements, the SEC may inadvertently discourage legitimate businesses from operating in this space. The costs and burdens associated with compliance could be prohibitive for smaller companies and startups, stifling innovation and limiting competition. It is crucial for regulators to strike a balance between investor protection and fostering a conducive environment for technological advancement. Moreover, the SEC's approach to regulating cryptocurrencies and digital assets should be consistent with the principles of financial innovation and consumer choice. The rapid growth of this industry has been driven by the ability of individuals to freely participate in decentralized networks and engage in peer-to-peer transactions. Imposing excessive regulations could undermine the very essence of this technology and limit the opportunities available to investors and consumers. In conclusion, while investor protection is of utmost importance, the SEC's proposed rule "Safeguarding Advisory Client Assets; Reopening of Comment Period" represents an overreach in its regulation of cryptocurrencies and digital assets. The unique characteristics of these assets require a nuanced approach that considers their decentralized nature and the existing legal framework. Excessive regulations could stifle innovation, hinder industry growth, and limit consumer choice. I urge the SEC to reconsider its proposed rule and work towards a regulatory framework that fosters innovation while ensuring investor protection in the cryptocurrency and digital asset industry. Thank you for considering my comments. Sincerely, Jum Sung ?? iPhone?? ??