Oct. 24, 2023
Dear Sir or Madam, I am writing to submit a public comment in response to the Securities and Exchange Commission's (SEC) proposal on "Safeguarding Advisory Client Assets." I have several areas of concern that I would like to address regarding the proposed rule. Detection and Deterrence of Non-Compliance: I request more information on the specific strategies and tactics that will be employed by the IRS to detect and deter non-compliance with the proposed regulations. Transparency in these methods is crucial to ensure effective, fair, and well-distributed enforcement measures. Impact on Small Businesses: Given the complexity of the digital asset space, I am concerned about the potential burden these proposed regulations may impose on small businesses. It is important to consider the navigational challenges they may face when complying with multiple layers of regulation. I urge the SEC to conduct further analysis of the impacts on small entities and explore targeted relief options to mitigate any undue burden. Engagement with Experts: I inquire about the process for engaging with experts in economics, finance, and technology to inform the development and implementation of these regulations. To ensure comprehensive and effective regulations, involving qualified professionals is imperative. I would like details on how their perspectives will be integrated into the decision-making process. Resources and Infrastructure: To ensure accurate and timely processing of information returns, clarification on the steps being taken to invest in new infrastructure, personnel, and capacity building initiatives is necessary. Adequate resources and support are essential for both taxpayers and regulatory agencies to facilitate compliance without unnecessary delays and errors. Impact on Blockchain Innovation: I am concerned about the potential impact of the proposed regulations on the development and deployment of innovative blockchain-based applications and services. Striking a balance between investor protection and supporting advancements in the digital asset space is crucial. Further analysis of these impacts and consideration of measures to foster innovation while safeguarding interests is warranted. Treatment of Digital Assets in Trust or Fiduciary Capacities: Clarification on the treatment of digital assets held in trust or other fiduciary capacities is necessary, especially regarding their classification and reporting requirements. Clear guidance will help ensure compliance without confusion or potential loopholes. Complexity for Taxpayers: I am concerned about the burden on taxpayers required to reconcile multiple sources of information related to their digital asset transactions. The reports filed by brokers, intermediaries, and third-party service providers may increase compliance complexities. Relief options for affected individuals should be explored to ensure a fair and effective reporting framework. Tracking and Addressing Technical Glitches: I would like to know the process for tracking and addressing any technical glitches or errors that may arise during the implementation of these regulations. Effective communication and updates when corrections or adjustments are made will streamline compliance and reduce potential disruptions. Methodologies for Data Analysis: I request more information on the specific methodologies and tools that will be employed by the IRS to analyze and interpret the vast amounts of data generated. Leveraging advanced analytics and machine learning algorithms will be crucial. Ensuring privacy and data security is of utmost importance. I appreciate your consideration of these concerns and request for more information. I believe that addressing these issues will contribute to the development of a practical and effective regulatory framework. Thank you for the opportunity to provide feedback on this significant proposal. Sent with Proton Mail secure email.