Oct. 29, 2023
Dear Securities and Exchange Commission, I am very concerned about the proposed rule on "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections, there are several areas of the current proposal that require careful consideration and revisions. One issue that needs to be addressed is the lack of industry expertise in digital assets and cryptocurrency demonstrated by the SEC. The proposed rule does not adequately account for the unique characteristics of this rapidly evolving field. Terms such as platform, software, and ledger are undefined and subject to multiple interpretations, leading to confusion and uncertainty for investment advisers and their clients. In addition, the proposal lacks clear and precise definitions for key terms like wallet and validator, critical components for understanding digital assets. The existing definitions provided do not accurately reflect their technical meaning, further exacerbating confusion and placing investment advisers and their clients at a disadvantage. Furthermore, the language used throughout the proposed rule is ambiguous, leaving room for conflicting interpretations. This ambiguity not only hampers compliance efforts but also increases the risk of unintentional non-compliance due to different understandings of the rule's requirements. I strongly urge the SEC to revisit these concerns and provide comprehensive and precise definitions for all relevant terms. It is crucial that the final rule's language is clear, unambiguous, and accurately representative of industry practices to facilitate effective compliance and ensure maximum investor protection. Thank you for your attention to this crucially important matter. I trust that the SEC will carefully consider these concerns while finalizing the proposed rule. Regards, Dan Filmore.