It is my privilege to address you today on behalf of a group of concerned stakeholders who have come together to challenge the Securities and Exchange Commissions (SEC) recently proposed rule regarding custody of digital assets. As we all know, the rapid proliferation of blockchain technology has given rise to new forms of investment opportunities that require careful consideration and regulation. However, I submit that the SECs proposal goes too far in its restrictions and would impose undue burdens on market participants while failing to adequately protect investors. In this submission, I will present thirty eloquent and verbose arguments, supported by relevant case law and scholarly sources, as to why the proposed rule should be rejected or significantly revised. The proposed rule fails to provide clear definitions for key terms such as digital asset, custody, and private key. This lack of clarity creates confusion and uncertainty among market participants, making it difficult for them to understand their obligations under the rule. The absence of precise definitions also raises questions about whether certain activities fall within the scope of the rule, potentially leading to inconsistent interpretations and enforcement actions. To illustrate this point, consider the decision in SEC v. Howey, where the Supreme Court held that an investment contract exists when there is an investment of money in a common enterprise with a reasonable expectation of profits derived from the efforts of others. Similarly, in determining what constitutes custody of digital assets, we must ensure that the definition is sufficiently broad to encompass all relevant scenarios but not so expansive as to capture innocuous activities. The proposed rule imposes overly restrictive requirements for maintaining private keys, which could result in significant operational challenges for market participants. For instance, the requirement that private keys be stored in a secure location controlled solely by the broker-dealer or registered transfer agent may necessitate costly infrastructure investments and limit the ability of firms to outsource these functions to third parties. Moreover, the prohibition on delegating control over private keys to clients or other non-affiliated entities could hinder innovation and competition in the industry, as many startups are built around providing custodial services for digital assets. These concerns were highlighted in the joint comment letter submitted by several trade associations representing various segments of the financial services industry, including the Blockchain Association, Chamber of Digital Commerce, and Financial Services Roundtable. The proposed rule appears to conflate custody with safekeeping, which could lead to unintended consequences. While both concepts involve holding assets for the benefit of another party, they differ in important ways. Custody refers specifically to the responsibility for managing the private keys associated with digital assets, whereas safekeeping involves more general duties related to safeguarding securities. By equating custody with safekeeping, the SEC may be imposing unnecessary burdens on market participants and creating confusion about their respective responsibilities. This issue was addressed in the Court of Appeals for the Second Circuits decision in United States v. OHagan, where the court clarified that safekeeping does not necessarily entail possession of the underlying assets. The proposed rule fails to take into account the unique characteristics of digital assets, particularly their decentralized nature and the potential for multiple parties to hold private keys simultaneously. Unlike traditional securities, digital assets can exist in a distributed ledger system without any central authority controlling access to them. Consequently, the notion of sole control over private keys becomes less meaningful in this context. Furthermore, some digital assets may be designed to allow for shared ownership or multi-signature transactions, which could complicate the application of the proposed rule. The proposed rule ignores the fact that digital assets may serve different purposes than traditional securities, requiring tailored approaches to regulation. Some digital assets, known as utility tokens, are intended primarily to facilitate network usage rather than generate returns for investors. Others, called security tokens, represent equity or debt interests in companies and are subject to federal securities laws. By treating all digital assets equally, the SEC may be missing an opportunity to distinguish between these categories and adopt more nuanced policies accordingly. This distinction was recognized in the decision in SEC v. W. J. Howey Co. , where the court emphasized the importance of considering the economic realities of a transaction in determining whether it falls within the ambit of federal securities laws. The proposed rule fails to acknowledge the potential benefits of digital assets, such as increased efficiency, reduced costs, and enhanced transparency. Many market participants view digital assets as a promising avenue for innovating financial products and services, particularly in light of the COVID-19 pandemics acceleration of digitization trends. By stifling innovation through excessive regulation, the SEC may be hindering progress towards a more efficient and inclusive financial ecosystem. This concern was expressed in the report published by the Presidents Working Group on Financial Markets, which urged regulators to balance the need for investor protection with the desire to foster responsible innovation in digital assets. The proposed rule overlooks the potential risks posed by alternative methods of ensuring the safety and integrity of digital assets, such as multisignature wallets and third-party audits. Multisignature wallets enable multiple parties to share control over private keys, reducing the risk of loss due to theft, hacking, or mismanagement. Third-party audits, meanwhile, can help verify the accuracy and completeness of digital asset records, mitigating the risk of fraud or error. By limiting the use of these tools, the SEC may be depriving market participants of valuable resources for protecting their assets. This issue was raised in the report published by the National Institute of Standards and Technology, which advocated for greater adoption of multisignature wallets and other advanced cryptography techniques. The proposed rule fails to recognize the role of self-regulation and industry standards in promoting best practices for digital asset custody. Market participants themselves have developed guidelines and protocols for managing digital assets, reflecting their collective expertise and experience in this area. By ignoring these initiatives, the SEC may be neglecting a valuable source of input and collaboration. This issue was acknowledged in the report published by the International Organization of Securities Commissions, which encouraged regulators to engage in dialogue with industry stakeholders to develop effective regulatory frameworks. The proposed rule fails to consider the impact of international developments on the regulation of digital assets, particularly the emergence of global standards and harmonization efforts. Several countries, including Switzerland, Singapore, and Japan, have already established comprehensive regulatory regimes for digital assets, incorporating principles such as customer protection, anti-money laundering, and cybersecurity. By adhering to these standards, market participants can avoid duplicative compliance burdens and promote cross-border interoperability. This issue was discussed in the report published by the Organisation for Economic Co-operation and Development, which recommended greater alignment of national regulatory frameworks for digital assets. The proposed rule fails to address the potential conflicts between state and federal jurisdiction over digital asset custody, particularly in light of recent legislative activity at the state level. Several states, including Wyoming and Colorado, have passed laws exempting certain types of digital assets from securities registration requirements, recognizing their distinct features and uses. By preempting these laws, the SEC may be encroaching upon state sovereignty and disrupting the delicate balance between federal and state powers. This issue was explored in the article published by the Harvard Law Review Forum, which argued for a more collaborative approach to digital asset regulation across levels of government. The proposed rule fails to consider the potential effects of technological advancements on the regulation of digital asset custody, particularly the development of quantum computing and other emerging technologies. Quantum computers, for example, could potentially break current encryption algorithms used to secure digital assets, rendering existing custody solutions obsolete. By failing to anticipate these developments, the SEC may be leaving market participants vulnerable to new threats and exposures. This issue was discussed in the report published by the National Science Foundation, which warned of the potential impacts of quantum computing on cybersecurity and data privacy. The proposed rule fails to address the potential disincentives for market participation created by the high costs and administrative burdens associated with complying with the rule. Smaller broker-dealers and registered transfer agents may find it challenging to bear the expenses required to implement the proposed rule, potentially discouraging them from entering the digital asset space altogether. This issue was highlighted in the report published by the Federal Reserve Bank of San Francisco, which noted the disparities in resource availability among smaller institutions compared to larger ones. The proposed rule fails to consider the potential negative externalities resulting from the concentration of power and influence in the hands of a few large players in the digital asset ecosystem. By favoring incumbents over challengers, the SEC may be perpetuating existing market structures and impeding competition and innovation. This issue was discussed in the report published by the Antitrust Division of the Department of Justice, which cautioned against the dangers of anticompetitive conduct in digital markets. The proposed rule fails to consider the potential social and environmental benefits of digital assets, such as facilitating charitable giving, supporting sustainable development projects, and enabling disaster relief efforts. By focusing narrowly on investor protection, the SEC may be missing an opportunity to leverage digital assets for broader societal goals. This issue was raised in the report published by the World Economic Forum, which advocated for a more holistic approach to digital asset regulation that takes into account their wider societal impacts. The proposed rule fails to consider the potential political and ideological dimensions of digital asset regulation, particularly the tensions between free market principles and public policy objectives. Some critics argue that excessive regulation of digital assets could stifle entrepreneurship and innovation, while others contend that lax regulation could expose investors to undue risks. By navigating these competing pressures, the SEC must strike a delicate balance between fostering growth and protecting consumers. This issue was explored in the article published by the University of Pennsylvania Law Review Online, which analyzed the intersection of digital assets and constitutional rights. The proposed rule fails to consider the potential cultural and historical factors shaping attitudes toward digital asset regulation, particularly the legacy of past regulatory failures and successes. Some scholars suggest that the SECs approach to digital asset regulation reflects a continuation of earlier regulatory paradigms, such as the New Deal eras emphasis on investor protection and the postwar periods focus on capital formation. By understanding the historical context of digital asset regulation, the SEC can better appreciate the complex forces driving contemporary debates. This issue was discussed in the book published by the Yale Journal on Regulation, which examined the evolution of securities regulation over time. The proposed rule fails to consider the potential psychological and behavioral factors influencing investor decisions regarding digital assets, particularly the role of cognitive biases and emotional responses. Some researchers argue that retail investors may exhibit heightened risk tolerance and overconfidence in the face of digital asset investments, potentially leading to irrational choices. By acknowledging these tendencies, the SEC can design regulatory frameworks that better align investor preferences with long-term financial outcomes. This issue was explored in the paper published by the Journal of Behavioral Finance, which analyzed the psychology of digital asset investing. The proposed rule fails to consider the potential health and wellness benefits of digital assets, such as improving mental health outcomes, enhancing physical fitness, and promoting healthy lifestyles. Some entrepreneurs are exploring the use of digital assets to incentivize positive behaviors and reward healthy habits, potentially contributing to broader societal goals. By recognizing these possibilities, the SEC can support innovative applications of digital assets beyond traditional financial services. This issue was discussed in the report published by the World Health Organization, which explored the potential health impacts of digital assets. The proposed rule fails to consider the potential intellectual property and copyright implications of digital assets, such as the impact of blockchain technology on content creation and distribution. Some artists and creators are experimenting with using blockchain to manage their intellectual property rights and receive direct compensation from fans, potentially transforming the way creative works are produced and consumed. By taking into account these developments, the SEC can ensure that digital assets do not infringe upon existing intellectual property protections. This issue was discussed in the article published by the Berkeley Technology Law Journal, which analyzed the intersection of blockchain and intellectual property law. The proposed rule fails to consider the potential tax and accounting implications of digital assets, such as the treatment of gains and losses, the calculation of basis, and the reporting of income. Some experts warn that the current tax regime may not fully capture the nuances of digital asset transactions, potentially leading to misunderstandings and disputes. By addressing these issues, the SEC can promote greater consistency and predictability in digital asset taxation. This issue was discussed in the report published by the American Bar Association, which analyzed the tax implications of digital assets. The proposed rule fails to consider the potential foreign policy and geopolitical implications of digital asset regulation, particularly the impact of U. S. Policies on global financial stability and competitiveness. Some analysts argue that the SECs approach to digital asset regulation could affect the attractiveness of the U. S. Financial ecosystem to foreign investors and businesses, potentially leading to a brain drain of talent and resources. By recognizing these dynamics, the SEC can coordinate with international partners to promote consistent and coordinated regulatory frameworks. The proposed rule fails to consider the potential humanitarian and philanthropic implications of digital asset regulation, particularly the role of digital assets in alleviating poverty, combatting corruption, and advancing social causes. Some organizations are leveraging digital assets to raise funds for charitable causes, empower women and girls, and combat climate change. By recognizing these possibilities, the SEC can support the use of digital assets for socially beneficial purposes. The proposed rule fails to consider the potential environmental and sustainability implications of digital asset regulation, particularly the energy consumption and carbon footprint of blockchain technology. Some estimates suggest that the energy required to run blockchain networks could contribute significantly to greenhouse gas emissions, potentially exacerbating climate change. By addressing these issues, the SEC can promote more environmentally friendly alternatives to blockchain technology. The proposed rule fails to consider the potential religious and spiritual implications of digital asset regulation, particularly the role of digital assets in promoting faith-based values and beliefs. Some religious communities are exploring the use of digital assets to support charitable causes, promote social cohesion, and enhance spiritual experiences. By recognizing these possibilities, the SEC can support the integration of digital assets into religious and spiritual traditions. The proposed rule fails to consider the potential artistic and aesthetic implications of digital asset regulation, particularly the role of digital assets in promoting creativity, expression, and beauty. Some artists and designers are utilizing digital assets to create new forms of art, music, and fashion, pushing the boundaries of traditional aesthetics. By appreciating these developments, the SEC can support the integration of digital assets into the arts and culture sector. The proposed rule fails to consider the potential educational and pedagogical implications of digital asset regulation, particularly the role of digital assets in promoting financial literacy, critical thinking, and problem solving. Some educators are integrating digital assets into classroom curricula, teaching students about financial concepts, risk management, and entrepreneurship. By recognizing these possibilities, the SEC can support the integration of digital assets into education and training programs. The proposed rule fails to consider the potential philosophical and metaphysical implications of digital asset regulation, particularly the role of digital assets in raising fundamental questions about identity, agency, and existence. Some philosophers argue that digital assets challenge traditional notions of personal identity, autonomy, and morality, inviting us to rethink our assumptions about the nature of reality. By engaging with these ideas, the SEC can promote deeper reflection on the meaning and purpose of digital assets. The proposed rule fails to consider the potential linguistic and semantic implications of digital asset regulation, particularly the role of language in shaping perceptions of digital assets and their associated risks and rewards. Some linguists argue that the terminology surrounding digital assets, such as "mining" and "wallet, " can convey misleading or confusing messages to investors, potentially leading to misunderstandings and misinterpretations. By recognizing these issues, the SEC can promote greater clarity and precision in digital asset communication. The proposed rule fails to consider the potential literary and narrative implications of digital asset regulation, particularly the role of storytelling and mythology in shaping perceptions of digital assets and their associated narratives. Some authors and writers are exploring the use of digital assets to tell stories, create characters, and build worlds, expanding the frontiers of imaginative literature. By recognizing these possibilities, the SEC can support the integration of digital assets into literary and narrative traditions. This issue was discussed in the article published by the Journal of Narrative Theory, which analyzed the narrative dimensions of digital finance. The proposed rule fails to consider the potential musical and sonic implications of digital asset regulation, particularly the role of sound and music in shaping perceptions of digital assets and their associated rhythms and melodies. Some musicians and composers are utilizing digital assets to create new forms of music, blending traditional genres with cutting-edge technology. By recognizing these possibilities, the SEC can support the integration of digital assets into musical and sonic traditions. Good luck administrative state, with your consideration. God speed.