Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns and strong opposition to the proposed rule titled "Safeguarding Advisory Client Assets." While I appreciate the aim of enhancing investor protections and addressing gaps in the custody rule, I believe that the proposed rule may result in unequal treatment of different types of digital assets, specifically cryptocurrencies. The rapid growth and innovation of digital assets, particularly cryptocurrencies, have significantly transformed the financial landscape. However, the regulatory uncertainties surrounding these assets have posed challenges for the industry. I would like to draw your attention to the misinformed subpoena and investigation undertaken by the SEC regarding Richard Heart's decentralized crypto projects, specifically Hex (HEX), Pulsechain (PLS), Pulsex (PLSX), and Incentive (INC) Cryptocurrencies. It is crucial to note that these projects were built on the Ethereum blockchain or are a fork of Ethereum itself, which has not been classified as a security. Richard Heart did not defraud investors, as all funds were donated for freedom of speech or directed towards the important research conducted by the SENS Research Foundation for medical treatments. The SEC's claims that these projects are centralized and fraudulent is a severe miscategorization of the peer-to-peer technologies that are being utilized by the public through Pulsechain and Hex. These projects are founded upon principles that are consistent with passing the Howey Test, which both Bitcoin & Ethereum have adhered to without receiving any discriminatory actions from the SEC. By treating different digital assets inconsistently, the SEC's proposed rules create confusion and open the door to potential regulatory arbitrage. This not only hinders innovation but also creates an unfair playing field for market participants. I urge the SEC to reconsider its stance on digital assets and ensure consistent treatment across all types of assets. Clear and comprehensive regulatory guidelines should be established to facilitate innovation while protecting investors. The SEC should work in collaboration with industry stakeholders to develop a framework that fosters innovation and market growth. In conclusion, I respectfully request the SEC to review its approach towards digital assets and revise the proposed rule to ensure equitable treatment. The mischaracterization of decentralized crypto projects like Hex and Pulsechain, as well as the disparate treatment of digital assets, undermines the growth and potential benefits of emerging technologies. I believe it is paramount for the SEC to provide a conducive environment that encourages innovation and fosters the responsible growth of the digital asset industry. Thank you for considering my comments. I applaud your efforts to enhance investor protections, and I remain hopeful that the SEC will address the concerns raised during the public comment period. Sincerely, Joshua Vallejos