Oct. 29, 2023
To whom it may concern, I am writing to provide my public opinion on the proposed rule regarding the safeguarding of advisory client assets, as outlined in File Number S7-31-21. I commend the Securities and Exchanges Commission (SEC) for seeking to enhance investors protections and address gaps in the current custody rule. However, I would like to express my concerns and outline potential issues with certain aspects of the proposed rule. Firstly, I would like to address the lack of clarity on compliance requirements for non-custodial services. The proposal fails to provide clear guidance on the specific obligations and expectations for investment advisers offering non-custodial services, creating uncertainty for market participants. This lack of clarity may impede innovation in the industry and hinder the ability of investment advisers to adapt to evolving technological advancements. Additionally, my concerns extend to the treatment of digital assets, particularly cryptocurrencies. Digital assets, such as cryptocurrencies, have transformed the finance industry and present unique challenges and opportunities. However, the regulatory uncertainties surrounding these assets create barriers to entry and hinder market innovation. I urge the SEC to provide clear and comprehensive guidelines for the treatment of digital assets, including specific compliance requirements for investment advisers engaged in activities involving cryptocurrencies. Furthermore, there is the pressing need to ensure that the guidelines put in place strike the right balance between protection and the promotion of organic market growth, without sacrificing people’s right to privacy while doing so. Overreach and abuse of power in regulating digital assets can stifle innovation and drive creators offshore. The proposed rule should focus on fostering and environment that encourages innovation and provides safeguards against fraudulent and manipulative practices, rather than imposing burdensome restrictions. In addition to addressing the concerns mentioned above, I also urge the SEC to consider the importance of education and widespread knowledge about digital assets. Given the evolving nature of this sector, it is crucial that market participants possess adequate knowledge of the risks and rewards associated with digital assets. Establishing guidelines that prioritize educational initiatives will ensure that market participants engage responsibly and differentiate between those capable and deserving of participation. Lastly, I emphasize the need for transparency and accountability in the regulatory process. It is imperative that the SEC exercises its authority in a fair and equitable manner, without succumbing to undue influence or manipulation. The United States must strive to retain its reputation as a country that fosters innovation, encouraging creators to build and establish their projects domestically. In concluding, I would like to thank the SEC for providing the opportunity for public comment and for considering all perspectives. I believe that by addressing the concerns raised regarding compliance requirements for non-custodial services, providing clarity on the treatment of digital assets, and promoting educational initiatives, the SEC can create a regulatory framework that encourages innovation while ensuring investor protections. Thank you for your attention to this matter. I trust that my feedback will be carefully considered in the ongoing rule-making process. Sincerely, Anonymous