Oct. 14, 2023
To Whom It May Concern: I am submitting this public comment in response to the Securities and Exchange Commission's proposed amendments to Rule 206(4)-2 regarding the custody of digital assets. While I appreciate the SEC's goals of safeguarding investor assets, I am concerned that certain requirements in the proposed rules could infringe on constitutionally protected free speech. Specifically, the rules' enhanced qualified custodian and reporting requirements as applied to native digital assets like cryptocurrencies may amount to a compelled disclosure of information that should be protected under the First Amendment. The transfer of cryptocurrency and recording of transactions on a blockchain have expressive elements that constitute speech. Requiring advisers to use qualified custodians and report on transactions imposes forced speech on the adviser. The Supreme Court has recognized First Amendment protections for disclosures required by government mandates. As such, the SEC should ensure any rules compelling speech from advisers meet the heightened constitutional scrutiny for such disclosures. The government interests behind the proposed custody rules may or may not satisfy that scrutiny. But the First Amendment issues should be thoroughly considered. I urge the SEC to reevaluate the qualified custodian and reporting requirements for native digital assets to ensure they do not unnecessarily infringe on advisers' constitutionally protected interests in free speech. Less burdensome alternatives may be available to achieve the SEC's goals here. Thank you for the opportunity to comment on this important issue. Sincerely, Jared Hamilton