Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns and opposition to the proposed rule on Safeguarding Advisory Client Assets. While I understand the importance of enhancing investor protections and addressing gaps in the custody rule, I believe that the proposed rule may have potential negative impacts on the rapidly growing field of decentralized finance (DeFi) and pose challenges for privacy and the overall growth of cryptocurrency and digital assets. One of my primary concerns is how the proposed rules may hinder the growth and development of decentralized finance projects. DeFi has emerged as a disruptive force, offering new possibilities for financial inclusion and innovative financial services. However, the stringent custody requirements and additional compliance burdens imposed by the proposed rules may stifle innovation in this space. I believe that the regulatory environment should foster innovation and encourage the responsible development of DeFi projects without imposing overly burdensome requirements that hinder progress. Furthermore, I have concerns regarding the privacy and safety of sensitive financial data and personal information. Allowing multiple third-party entities to access and know such information, including social security numbers, raises serious privacy concerns. The potential risks associated with data breaches and identity theft cannot be ignored. I strongly believe that it is crucial to strike a balance between investor protection and the privacy rights of individuals. The proposed rules should incorporate robust privacy safeguards to ensure that sensitive information is adequately protected. Additionally, I worry about the negative impacts of excessive regulatory speculation on cryptocurrency and digital assets. The revolutionary potential of these assets has often been overshadowed by regulatory uncertainties and excessive caution. There is a substantial fear among market participants that overly strict regulations may stifle innovation, dampen investor sentiment, and hamper the development of this transformative technology. While it is important to develop a regulatory framework that promotes investor protection, it is equally important to foster an environment that stimulates growth, encourages entrepreneurship, and positions the United States as a leader in the emerging digital economy. I am also concerned that excessive and restrictive regulations from the SEC may cause the United States to lose its ground to other nations as they progress with cryptocurrency and digital assets. It is important to strike a balance between oversight and facilitating innovation, rather than stifling it. The trickle of talent and projects leaving the United States due to regulatory uncertainty and fear of government overreach is alarming. We must ensure that our regulatory environment is conducive to attracting top talent and fostering an ecosystem of robust and thriving crypto and digital asset projects. In conclusion, while I appreciate the SEC's objective of enhancing investor protection and addressing gaps in the custody rule, I urge the Commission to consider the potential negative impacts the proposed rule may have on decentralized finance, privacy, and the growth of cryptocurrency and digital assets. It is essential to strike a balance between regulation and innovation to ensure economic growth, financial inclusion, and the United States' position as a global leader in this rapidly evolving industry. I encourage the SEC to engage with stakeholders, considering their concerns and exploring alternative regulatory approaches that foster growth and innovation while protecting investor interests. Thank you for considering my comments. I believe that an open and collaborative regulatory approach is essential for the long-term success of the industry and the public interest. Should you require any further clarification or information in regards to my comments, please do not hesitate to contact me. Sincerely, Anonymous US Citizen