Subject: Concerns Regarding SEC Proposal IA–6240, “Safeguarding Advisory Client Assets” Dear Securities and Exchange Commission, I am writing to express my reservations about the proposed amendments to the current custody rule under the Investment Advisers Act of 1940, as detailed in Release No. IA–6240 (Feb. 15, 2023). While I appreciate the Commission’s efforts to protect advisory client assets, I believe there are several legal and constitutional issues that warrant careful consideration. 1. Statutory Authority: The SEC’s jurisdiction is primarily defined by federal securities laws, which may not encompass all cryptocurrencies. An attempt to regulate assets that fall outside this jurisdiction could be perceived as an overreach of the SEC’s statutory authority. It is imperative that the SEC operates within its legal parameters to maintain its credibility and legitimacy. 2. Equal Protection Under the Law: The selective regulation of certain cryptocurrencies over others could potentially infringe upon the equal protection clause, which mandates that similar entities or individuals should not be treated differently under the law. It is crucial that any regulatory measures are applied uniformly across all cryptocurrencies to uphold the principles of fairness and justice. 3. First Amendment Rights: Cryptocurrencies can arguably be viewed as a medium of expression or speech. Any attempt to regulate them without a solid legal foundation could potentially infringe upon First Amendment rights pertaining to free speech and association. It is essential that any regulatory actions respect these fundamental freedoms. 4. Respect for Constitutional Separation of Powers: The U.S. Constitution delineates a clear separation of powers among the legislative, executive, and judicial branches of government. If the SEC were to extend its regulatory reach to cryptocurrencies beyond its established mandate, it could potentially be viewed as infringing upon the authority of either the legislative or judicial branches. It is vital that the SEC respects this constitutional division of responsibilities to maintain the balance of power and uphold the rule of law. In light of these concerns, I respectfully urge the Commission to reconsider its proposal and ensure that any amendments to the current custody rule are within its legal purview and respect First Amendment rights. I appreciate your understanding of the complexities involved in this matter. As a concerned European investor in cryptocurrencies, I understand that the actions of the SEC have had a significant impact on my investments. The perceived attacks on cryptocurrencies have created an atmosphere of uncertainty and fear in the market, which has been detrimental to investors like myself. Despite the fact that the cryptocurrency I’m invested in do not appear to violate any aspect of the Howey Test, the SEC’s actions and allegations, which may be based on inadequate research or misinterpretations, have led to a substantial decrease in market capitalization. Specifically, these actions have resulted in a loss of $3.5 billion in market cap for the cryptocurrency I bought. This situation underscores the importance of sound, fair, and transparent regulatory practices. It is crucial for regulatory bodies like the SEC to ensure their actions are based on thorough research and accurate information to prevent unnecessary market disruptions and protect investors’ interests. Thank you for your attention to these matters.