Oct. 23, 2023
Public Comment on Safeguarding Advisory Client Assets To Whom It May Concern, I am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets" by the Securities and Exchange Commission (SEC). While I understand the aim of enhancing investor protections and addressing custody rule gaps, I believe that the proposed rule may have potential negative impacts on investor access and raises concerns regarding poorly defined terms. Firstly, I am concerned about the potential restrictive impact the proposed rules may have on investor access to digital assets, hampering their ability to participate in this emerging asset class. As the digital asset market continues to grow, it is crucial to ensure that regulations do not curtail innovation and hinder investor access to this evolving space. The proposed rules, as currently outlined, may create unnecessary barriers, deterring investors from participating and potentially disadvantaging them in the long run. Additionally, my concerns also lie with the lack of clarity around the definitions provided in the proposal. The usage of terms like "platform," "software," and "ledger" without clear definitions makes the interpretation of these terms subjective and open to multiple interpretations. This lack of precision may result in confusion among investors, advisers, and regulatory entities, ultimately impeding the goals of the proposed rule. Furthermore, the definitions of terms such as "wallet" and "validator" do not align with their technical meaning, adding to the opacity surrounding important aspects of digital assets. Clearer definitions are crucial to ensure effective regulatory oversight and consistent application of the proposed rule. In addressing these concerns, it is imperative that the SEC reassess the scope and impact of the proposed rule on investor access within the digital asset space. Encouraging innovation and facilitating investor participation in this sector should be priorities, rather than imposing unnecessary restrictions that could inhibit growth and opportunity. Furthermore, I urge the SEC to address the issues surrounding poorly defined terms within the proposed rule. Providing unambiguous definitions of critical terms is vital to ensure clarity, consistency, and better understanding among investors, advisers, and regulatory bodies. This would assist in avoiding potential misinterpretations and confusion, paving the way for effective implementation and enforcement. In conclusion, the proposed rule on "Safeguarding Advisory Client Assets" raises concerns about potential negative impacts on investor access and the presence of poorly defined terms within the regulation. As a concerned individual, I believe that it is crucial to strike a balance between investor protection and fostering innovation and access within the rapidly evolving digital asset landscape. I request the SEC to carefully consider these concerns and address them adequately to create a transparent and effective regulatory environment. Thank you for considering my comments. Should there be any further opportunities to contribute to the public discourse on this matter, I am eager to engage. Furthermore, if there are any general questions or clarifications regarding the proposal that I can assist with, please do not hesitate to reach out. Sincerely, Ryan Colt