Oct. 19, 2023
Dear SEC, I am writing to express my deep concerns and opposition to the proposed rule, "Safeguarding Advisory Client Assets." As someone who has been closely involved in the blockchain industry and has witnessed the damaging effects of SEC policies on small blockchain businesses, I urge you to reconsider the potential impacts of this rule on the sector. The proposed rule, although aimed at enhancing investor protection, fails to recognize the unique challenges faced by small blockchain businesses. These businesses are often at the forefront of innovation and are driving the growth of this emerging industry. Imposing burdensome reporting requirements and compliance costs on these small entities could have dire consequences for their ability to thrive and compete globally. The blockchain industry is characterized by its dynamic nature, rapid technological advances, and global competition. The proposed rule, with its rigid requirements and standardized approach, risks stifling innovation and hindering the economic potential that blockchain technology holds. This could have a detrimental effect on job creation, economic growth, and the United States' global competitiveness in this space. Moreover, the SEC's actions and policies towards blockchain businesses in the past have created an atmosphere of uncertainty and regulatory overreach. Small blockchain businesses have struggled to navigate the complex regulatory landscape, often leading to stifled growth, relocation to more crypto-friendly jurisdictions, or worse, outright shutdowns. The proposed rule continues this trend, exacerbating the challenges faced by small blockchain businesses and discouraging investment in this promising sector. I implore the SEC to adopt a more tailored and flexible approach when it comes to regulating blockchain businesses. This approach should consider the unique characteristics and challenges of the blockchain industry, ensuring that regulations support innovation and entrepreneurship, rather than impede it. It is vital that the SEC strikes a balance between protecting investors and fostering an environment that encourages the growth of small blockchain businesses. This can be achieved by engaging with industry stakeholders, collaborating on regulatory frameworks, and promoting open dialogue. By doing so, the SEC can lay the foundation for a thriving blockchain ecosystem that benefits all stakeholders and positions the United States as a leader in this transformative technology. In conclusion, I strongly urge the SEC to reconsider the proposed rule and its potential impact on small blockchain businesses. It is essential to adopt a regulatory approach that fosters innovation, encourages investment, and supports the growth of this vital industry. Failure to do so risks undermining the extraordinary potential that blockchain technology holds. Thank you for considering my concerns. I hope that my input will contribute to a more balanced and effective approach to regulation in the blockchain industry. Sincerely, Alex Rafalovichx