Oct. 29, 2023
? ? Dear Rulemaking Team, I am writing to express my concerns regarding the proposed "Safeguarding Advisory Client Assets" rule by the Securities and Exchange Commission (SEC). While I understand the need to enhance investor protections and address gaps in the custody rule, I believe that the lack of clarity on the definition of digital assets is a significant issue that needs to be addressed. Digital assets, particularly cryptocurrencies built on blockchain technology, are transforming the financial landscape. However, regulatory uncertainties surrounding these assets continue to pose challenges. The SEC's proposal does not provide clear guidance on what constitutes a digital asset, leading to confusion and potential misinterpretation. As an investor in digital assets myself, I am deeply concerned that the proposed rule will have a detrimental impact on me and others in the digital asset community. It is crucial that any regulation pertaining to these assets be crafted with precision and clarity to ensure that both investor protections and innovation can thrive harmoniously. One specific concern I have is the application of the rule to crypto assets. The proposal acknowledges the challenges in demonstrating exclusive control over digital assets. However, it falls short in providing sufficient clarity on how investment advisers can adequately safeguard these assets while respecting the unique characteristics of blockchain technology. Moreover, the proposal does not take into account the rapidly evolving nature of the digital asset industry. Blockchain technology is still in its infancy, with new use cases and functionalities emerging regularly. The lack of clarity in the proposed rule hinders innovation and may discourage investment in this transformative technology. In addition, the economic analysis provided by the SEC raises concerns regarding the potential impact of the proposed rule on efficiency, competition, and capital formation. While the rule aims to enhance investor protections, there is a risk that it may inadvertently stifle growth and innovation in the digital asset industry. I urge the SEC to consider collaborating with industry experts and stakeholders to develop a more nuanced and comprehensive approach to regulating digital assets. This would ensure that investor protections are upheld without stifling the potential benefits that digital assets can bring to our financial system. Furthermore, I encourage the SEC to explore alternative approaches to regulating digital assets that may better address the unique characteristics and risks associated with these assets. By embracing innovation and taking a proactive stance, the SEC can position the United States as a global leader in the digital asset space. In conclusion, I believe that the lack of clarity on the definition of digital assets in the proposed rule is a significant concern. As an investor in digital assets, I urge the SEC to consider the potential harm that the rule may impose on this nascent industry and to work towards crafting regulations that support both investor protections and innovation. Thank you for considering my comment. Sincerely, Alan Veach Sent from my iPhone