Oct. 28, 2023
Dear Sir/Madam, I am writing to express my concerns regarding the proposed rule on the safeguarding of client assets by investment advisers, as outlined in the Securities and Exchange Commission's (SEC) recent proposal. While I acknowledge the need to enhance investor protections and address gaps in the custody rule, I believe there are certain areas of the proposal that require further clarity, particularly in relation to recordkeeping requirements for digital assets. Digital assets, such as cryptocurrency, have emerged as transformative financial instruments, built on innovative blockchain technology. However, their unique characteristics have also created regulatory challenges. Considering the increasing adoption of digital assets by investment advisers, it is imperative that the proposed rule adequately addresses the recordkeeping requirements for these assets. Unfortunately, the current proposal falls short in providing clear guidance on how investment advisers should maintain records for digital assets. This lack of clarity not only creates uncertainty for market participants but also hampers the SEC's ability to effectively enforce regulations in this rapidly evolving sector. In order to ensure meaningful investor protection and effective oversight, it is crucial that the SEC provides comprehensive and unambiguous guidance on the recordkeeping requirements for digital assets. Furthermore, the SEC should consider working closely with industry experts and stakeholders to develop standards and best practices specifically tailored to digital assets. This collaborative approach can help address the unique challenges associated with these assets, while also ensuring regulatory compliance and safeguarding investor interests. Failure to provide clear guidance and establish robust recordkeeping requirements for digital assets may undermine the SEC's overall goal of enhancing investor protection and perpetuate market uncertainty. It is worth mentioning that, while the SEC is grappling with the complexities of digital assets, other jurisdictions have made significant strides in regulating this space. For instance, countries like Switzerland, Singapore, and the United Kingdom have proactively implemented coherent frameworks for dealing with digital assets, incorporating clear recordkeeping guidelines. By benchmarking international best practices, the SEC can gain valuable insights to further refine its proposals and ensure its regulatory approach remains both innovative and effective. In conclusion, I urge the SEC to carefully address the recordkeeping requirements for digital assets in its final rule. Clear and comprehensive guidance is essential for investment advisers to confidently navigate the ever-evolving landscape of digital assets, while also allowing the SEC to efficiently enforce regulations and protect investors. By embracing collaboration and learning from successful regulatory frameworks implemented by other jurisdictions, the SEC can set a precedent for prudent and forward-thinking regulation in the digital asset space. Thank you for considering my concerns. I look forward to seeing amendments to the proposed rule that establish robust and clear recordkeeping requirements for digital assets, fostering investor confidence and regulatory certainty. Sincerely, A Concerned U.S. Citizen