Oct. 19, 2023
To whom it may concern, I am writing to express my strong concerns and opposition to the proposed amendments to the custody rule, as outlined in the recent announcement by the Securities and Exchange Commission. While I appreciate the importance of regulation and oversight in the financial industry, I believe that the proposed amendments, particularly in light of the private fund adviser audit rule, may have unintended consequences on the blockchain and crypto asset space, and potentially on innovation more broadly. Here are my key concerns: Innovation Stifling: The blockchain and crypto industry is characterized by its rapid innovation and technological advancements. Overly strict regulations could potentially stifle this innovation and make it difficult for startups and small businesses to navigate compliance, leading to a less dynamic and competitive environment. Administrative Burden: The proposed amendments are likely to increase the administrative burden on businesses operating in the blockchain and crypto space. This could divert resources away from technological development and growth. Unintended Consequences: These regulations may deter potential investors, including institutional investors, from entering the blockchain and crypto market. The increased compliance requirements might be seen as cumbersome and could discourage investment. Industry Growth: The blockchain and crypto sector has shown great potential for growth, bringing benefits in terms of financial inclusion and technological advancement. Overly restrictive regulations could impede this growth and limit the potential benefits for society. I respectfully urge you to reconsider the proposed amendments and ensure that they strike a balance between regulatory oversight and fostering innovation. It's crucial that we create a regulatory framework that encourages responsible growth while providing necessary safeguards. Thank you for taking the time to consider these concerns. I hope that the final regulatory framework will take into account the unique characteristics and potential of the blockchain and crypto industry.