Oct. 29, 2023
Dear SEC, I am writing to provide my public comment on the proposal "Safeguarding Advisory Client Assets" from the Securities and Exchange Commission (SEC). While I appreciate the aim of the proposed rule to enhance investor protections and address gaps in the custody rule, I have several concerns and issues that I would like to raise. Firstly, it is evident that the SEC lacks sufficient expertise in digital assets and cryptocurrency, which has resulted in a lack of understanding of the industry's unique characteristics. This lack of industry expertise is reflected in the proposed rule, particularly in its application to crypto assets. The SEC should recognize the need to collaborate with experts in the field to ensure that the rule accurately reflects the realities of this emerging market. Furthermore, I am concerned about the potential for unfair treatment resulting from regulatory complexity across countries. As the global digital asset industry continues to expand, it is imperative that regulatory frameworks are harmonized to avoid creating unnecessary barriers to innovation. Inconsistencies in regulations can create operational challenges for industry participants and hinder their ability to provide services across borders. The SEC should consider aligning its proposed rule with international best practices to promote consistency and facilitate global participation in the digital asset market. Additionally, the proposed rule appears to place an overemphasis on revenue collection at the expense of fairness, equity, or neutrality. While it is important to implement measures that protect investor assets, it is equally important to ensure that regulatory requirements are proportionate and do not unduly burden market participants. The SEC should carefully consider the potential impact of these requirements on the overall competitiveness of the advisory industry and strike a balance between investor protection and facilitating efficient capital formation. In conclusion, I urge the SEC to address the lack of industry expertise in the proposed rule, collaborate with experts in the digital asset space, and consider aligning its regulations with international best practices. Furthermore, I recommend that the SEC carefully evaluate the potential impact of the proposed rule on market participants and strive for a balanced approach that promotes fairness, equity, and efficiency in the advisory industry. Thank you for considering my concerns and issues in relation to the proposal.