Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule "Safeguarding Advisory Client Assets." While I recognize the importance of protecting client assets and enhancing investor protections, I believe that certain aspects of the rule may have unintended negative consequences, particularly regarding potential negative impact on financial inclusion and identity theft. Firstly, I am concerned that the proposed rules may limit the ability of underserved populations to access digital assets and participate in the financial system. By expanding the coverage of the rule to include a broader range of investments, particularly crypto assets, there is a risk of creating barriers to entry for individuals who rely on digital assets for financial inclusion. Many individuals in underserved communities lack access to traditional financial services and rely on digital assets as a means of payment, savings, and investment. Imposing excessive regulatory burdens on these assets could hamper their ability to participate in the financial system and push them further away from traditional avenues of financial inclusion. Furthermore, the requirement for investment advisers to collect user information under the proposed rules raises significant concerns regarding identity theft. The collection and storage of sensitive taxpayer information without proper safeguards create a potential honey pot for malicious actors seeking to exploit these databases. As the proposal aims to require investment advisers to store client information for recordkeeping purposes, it is essential to ensure stringent security measures are in place to safeguard this sensitive data. Failure to adequately address this issue could result in an increased risk of identity theft and fraudulent activities, ultimately undermining the very goal of protecting investor assets. Moreover, the proposed rule's emphasis on custodian scrutiny fails to recognize the challenges of demonstrating exclusive control over certain digital assets. The nature of decentralized finance (DeFi) and blockchain technology makes it difficult to prove exclusive control, as multiple parties often have access to the same assets or smart contracts. Blanket requirements that investment advisers must adhere to traditional custodian controls may not align with the unique characteristics of digital assets and may impede innovation in this rapidly evolving sector. It is crucial that any regulations strike a balance between robust investor protection and fostering innovation in the decentralized finance space. In considering the economic analysis put forth by the SEC, it is important to recognize that a one-size-fits-all approach may not adequately capture the varying practices among investment advisers and the potential negative economic effects. Compliance costs associated with the proposed rule could disproportionately impact smaller investment advisers, limiting their ability to compete and potentially reducing investor choice. It is essential to carefully balance the costs and benefits of the rule to prevent unintended consequences such as reduced efficiency, limited competition, and increased burdens on small entities. In conclusion, while I support the SEC's efforts to enhance investor protections, I urge you to carefully consider the potential negative impact on financial inclusion and the risk of identity theft posed by the proposed rule. It is crucial to strike a balance between safeguarding client assets and fostering innovation, particularly in the rapidly evolving world of digital assets. I encourage the SEC to explore alternative approaches that mitigate potential negative consequences while still achieving the goal of enhanced investor protections. Thank you for considering my concerns, and I trust that you will carefully evaluate the feedback provided by various stakeholders in order to arrive at a balanced and effective regulatory framework. Sincerely, John Kurkowski