Oct. 19, 2023
I am writing to express my strong opposition to the proposed legislation by the SEC concerning the safeguarding of advisory client assets in the realm of cryptocurrency and digital assets. I appreciate the SEC's role in ensuring investor protection and market integrity, but I believe the current approach outlined in the proposed legislation may inadvertently hinder innovation and industry growth. I understand the necessity of regulatory oversight in the dynamic digital asset industry. However, I believe the extension of existing laws, such as the Investment Advisers Act of 1940, to cover cryptocurrency and digital assets might result in redundant regulations and increased burdens for market participants. Moreover, given the decentralized nature of these assets and their operation on blockchain technology, there is a legitimate concern about whether the proposed legislation falls within the SEC's jurisdiction. Furthermore, the proposed legislation does not adequately account for the distinctive features of cryptocurrency and digital assets. These assets are specifically designed to be secure and resistant to fraud or manipulation. The industry has made significant progress in developing secure custody solutions and implementing robust security measures. Imposing additional regulations might disrupt these advancements and hinder the industry's ability to self-regulate effectively. In addition, I am concerned about the potential impact on innovation and entrepreneurship in the digital asset space. Cryptocurrency and digital assets have the potential to democratize finance, providing greater access to financial services and fostering economic empowerment. Excessive regulations and stringent custody requirements could deter businesses and entrepreneurs, hindering growth and driving innovation away from the United States. I urge the SEC to reconsider the proposed legislation and adopt a balanced approach that recognizes the unique nature of cryptocurrency and digital assets. Striking a balance between investor protection and fostering innovation is vital for the continued growth and development of this transformative industry. Thank you for your attention to this matter.