Oct. 29, 2023
I am a retail investor, and I am writing to express my views and obtain clarification from the SEC on specific aspects of its proposed changes to Rule 223–1 under the Advisers Act, which I understand will, in addition, have international application. Kindly provide me, as a retail investor, with comprehensive answers to the following prior to deciding to implement any changes which could have any consequences on my current investments: 1. Impact on Crypto Assets: The proposed changes if passed, although not explicitly mentioning crypto assets, will undoubtedly impact advisers involved in crypto-related activities. As such, kindly provide insights into the rationale and any underlying assumptions for the proposed expansion of scope, based on the following considerations: 2. Crypto-Specific Considerations: a. How does the SEC account for well-established decentralization principles in the context of the proposed changes? In the crypto world, where direct ownership and control by individual users render the role of traditional financial advisers insignificant, what considerations guide the SEC's approach? b. What is the justification for additional audits, considering they are obviously burdensome, costly, and time-consuming for all retail investors / taxpayers, and given that Distributed Ledger Technology transactions are publicly recorded on the blockchain, offering inherent transparency and immediate auditability. Why then is there a need for further audit requirements? c. How does the SEC plan to leverage the positive aspects of decentralized systems in its regulatory approach? Considering that decentralized systems enable independent verification of client assets without the need for traditional audits, how does the SEC aim to encourage investors to embrace the benefits of decentralization? d. On the contrary to the above considerations, is the SEC's approach in proposing this rule rather geared towards encouraging the use of third parties in a technology designed otherwise? Given the well-documented negative consequences involving third-party solutions in the crypto space, such as FTX and Celsius to name but a few, how does this align with the SEC's commitment to retail investor protection? Does it not contradict the advantages offered by decentralized platforms in terms of both security and transparency? Thank you for the opportunity to comment and offer you the equal opportunity to provide me with your considered comments to these, my questions. Kind Regards.