The recent proposal by the SEC, titled "Safeguarding Advisory Client Assets; appears to be yet another instance of overreach that may severely hinder the innovation in the digital asset space. The past actions of the SEC have already caused a significant loss for crypto investors, not due to fraud by the companies, but rather through market disruptions caused by incessant and, often, unnecessary investigations. These actions have only resulted in crashing the crypto market time and again, causing undue financial stress to thousands of investors. Moreover, the proposal by the SEC seems to misunderstand the nature of crypto investments. The belief that crypto investors would transfer their investments into traditional stocks if the crypto market is heavily regulated, is fundamentally flawed. Crypto investors are drawn to the decentralization and the innovation that digital assets represent, and they will likely find other avenues to invest in, away from traditional banking systems if stifling regulations are imposed. Furthermore, the best way to mitigate the volatility of the crypto market is not through heavy-handed regulations but through education. The public should be educated about the volatile nature of cryptocurrency investments so they can make informed decisions based on their risk tolerance. This balanced approach will address the SEC’s concerns while still allowing for continued innovation and growth in the digital asset sector. It's crucial to note that digital asset startups are usually spearheaded by individuals who might not have extensive financial resources or tax expertise. They thrive on the flexibility and the innovative spirit that the digital asset space provides. The SEC’s proposed rule could deter these innovators, further stifling the innovation in the digital asset sector within the US. Moreover, the stringent regulations could drive digital asset companies and the ensuing innovation to other jurisdictions with more favorable regulatory environments. The US stands at the cusp of a digital asset revolution, and it would be a grave mistake to shun this innovation due to over-regulation. Hence, while regulation is essential for protecting investors and ensuring market integrity, it should not come at the cost of curbing innovation and growth in this burgeoning sector.