Oct. 22, 2023
Dear SEC, I am writing in response to the Securities and Exchange Commission's proposed rule on "Safeguarding Advisory Client Assets." I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule. However, I have significant concerns regarding the unequal treatment of different market participants under the proposed regulations. One of my main concerns is the confusion that will arise from the reporting requirements imposed on various participants in DeFi (Decentralized Finance). The proposed regulations create reporting obligations for multiple market participants, leading to inconsistent and redundant reports for the same transaction. This creates unnecessary complexities and burdens for market participants, potentially hindering innovation and inhibiting the growth of the DeFi sector. Furthermore, the unequal treatment of different market participants in the proposed rules can result in unfair competition and potential market distortions. It is crucial for regulations to promote a level playing field and equal treatment for all market participants to ensure fair competition and uphold the integrity of the market. I urge the SEC to consider a more balanced approach that takes into account the unique characteristics and complexities of the DeFi ecosystem. Alternative solutions, such as streamlined reporting requirements or the development of industry standards, should be explored to achieve the desired investor protections without stifling innovation. In conclusion, while I support the SEC's goal of safeguarding client assets, I believe that the proposed rule should strive for fairness, consistency, and clarity in its treatment of different market participants. It is vital to strike a balance between investor protections and the need to foster innovation in the rapidly evolving DeFi space. Thank you for considering my comments. I hope that the SEC will carefully consider the concerns raised by the public and work towards robust regulations that protect investors while encouraging a vibrant and competitive market. Sincerely, Anonymous