Oct. 22, 2023
I am writing to express my concerns regarding the proposed rule "Safeguarding Advisory Client Assets" by the Securities and Exchange Commission (SEC). While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, there are several areas where I believe the proposed rule falls short in providing adequate safeguards and considerations. Firstly, the proposed rule fails to adequately consider self-custody solutions, which hinders the development of user-controlled asset management. In an era where digital assets and crypto have become increasingly prominent, it is crucial for regulators to recognize the potential benefits and challenges associated with these innovative technologies. Unfortunately, the SEC's proposed rules do not encompass the unique characteristics of digital assets, limiting the ability of investors to effectively manage and safeguard their own assets. This lack of consideration may impede the growth and evolution of the digital asset industry, causing a loss in investment opportunities for individuals and stifling innovation. Furthermore, the proposed rule lacks clarity and guidance when it comes to digital assets or cryptocurrencies. These assets, built on blockchain technology, have demonstrated the potential to transform the financial industry. However, regulatory uncertainties surrounding digital assets have created significant challenges for both investors and companies operating in this space. Without clear and well-defined rules and regulations, investors face increased risk and uncertainty, leading to potential losses in investment. It is crucial for the SEC to address these concerns and provide a clear framework to ensure the proper safeguarding of digital assets while fostering innovation. It is also concerning that the proposed rule does not adequately address the potential loss in investment that could arise from the lack of actual rules or regulations set in place for the crypto industry. The volatility and complexity of the crypto market require comprehensive rules and regulations to protect investors and ensure market integrity. By failing to provide clear guidelines and requirements for custodianship of digital assets, the proposed rule leaves investors vulnerable to potential fraud and theft. Additionally, the absence of rules may discourage institutional investors from entering the crypto market, ultimately limiting its growth and potential benefits for both investors and the economy. In conclusion, while the SEC's proposed rule "Safeguarding Advisory Client Assets" aims to enhance investor protection, it falls short in adequately addressing the challenges posed by self-custody solutions and the unique characteristics of digital assets. It is imperative for the SEC to recognize the importance of embracing and regulating emerging technologies in the financial industry to ensure investor confidence and promote innovation. I urge the SEC to enhance the proposed rule by providing clear guidance and regulations for digital assets, taking into account the rapidly evolving landscape of the crypto market. By doing so, the SEC can effectively protect investors and foster the growth of a more inclusive and secure financial ecosystem. Thank you for considering my comments and concerns regarding the proposed rule. Sincerely, Jun