Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I believe that certain aspects of the proposal may exceed the SEC's regulatory authority and fail to protect the public interest, particularly in relation to its inclusion of crypto assets. One major area of concern is the poorly defined terms used in the proposed regulations. Terms like "platform," "software," and "ledger" are left undefined, making them susceptible to various interpretations. Additionally, the definition of terms such as "wallet" and "validator" do not accurately reflect their technical meaning in the cryptocurrency industry. This lack of clarity will undoubtedly lead to confusion and challenges when it comes to complying with the regulations. Furthermore, while I understand the need to safeguard client assets, the proposed rule seems to be disregarding the intention and benefits of cryptocurrencies. Cryptocurrencies have gained popularity due to their decentralized nature, which allows individuals to have greater control over their assets. By imposing stringent regulations on crypto assets, the SEC is undermining the very essence of this innovation, limiting individuals' ability to participate and benefit from the cryptocurrency market. Additionally, it is crucial to consider the overreach of regulatory authority in this proposal. The SEC's role should be to regulate securities and maintain the integrity of the capital markets. However, the proposed rule seems to extend beyond this mandate, encroaching on areas that are better regulated by other agencies. It is important to maintain the appropriate balance of regulatory oversight while avoiding unnecessary interference in the development of emerging technologies. In conclusion, I urge the SEC to reconsider certain aspects of the proposed rule on "Safeguarding Advisory Client Assets." Clarifying and refining the definitions and provisions related to crypto assets is essential to ensure effective regulation without stifling innovation. It is pivotal that the SEC upholds its duty to protect the public interest while embracing the potential benefits that cryptocurrencies can bring to investors and the financial industry as a whole. Thank you for considering my comment and the concerns I have raised. I trust that all public comments received on this proposal will be carefully evaluated, and any necessary adjustments will be made to ensure a balanced and effective regulatory framework. Thank you.