Oct. 29, 2023
Dear Gary Gensler, I am writing to provide my comments and concerns regarding the proposed rule, "Safeguarding Advisory Client Assets." As a blockchain enthusiast with a keen interest in digital assets and cryptocurrencies, I believe it is important to carefully consider the potential impact of this rule on this emerging and rapidly evolving industry. One specific concern I have regarding the proposed rule is its application to digital assets or cryptocurrencies. The rule acknowledges the challenges in demonstrating exclusive control over crypto assets, but it is important to recognize that these assets operate on a unique technology, namely blockchain. Blockchain technology enables decentralized ownership and peer-to-peer transactions, making it fundamentally different from traditional custodial arrangements. While I understand the need to enhance investor protections and address potential risks associated with cryptocurrencies, I believe that the Know Your Customer (KYC) requirements, as proposed in the rule, may inadvertently add another layer of risk. KYC requirements essentially create a honeypot for hackers, as they concentrate a significant amount of sensitive personal information and financial assets in a centralized manner. In light of past data breaches in the financial sector, it is crucial to strike a balance between protecting investors and safeguarding their information from potential dangers. Instead of solely relying on KYC requirements, I recommend exploring alternative security measures that leverage the unique characteristics of blockchain technology. For example, the use of cryptographic signatures and multi-signature wallets can provide an additional layer of security without compromising the privacy of individual investors. Furthermore, I encourage the SEC to work closely with industry experts and engage in a collaborative dialogue to address the unique challenges posed by digital assets. Engaging with blockchain developers, cyberseurity professionals, and cryptocurrency experts would help develop more effective and targeted regulatory solutions that are adaptable to the dynamic nature of this technology. While I support the goal of enhancing investor protections, I believe that the proposed rule, as it relates to digital assets and cryptocurrencies, requires further consideration and collaboration with industry stakeholders. As a technology enthusiast, I am committed to promoting the responsible development and regulation of emerging technologies, and I appreciate the opportunity to provide input on this important matter. KYC ONLY ADDS MORE RISK! It creates a honeypot for malicious hackers! how many times to centralized companies need to lose customer's personal data before we learn? The best way to keep customer's data safe is to NOT COLLECT IT IN THE FRIST PLACE. Thank you for your attention to this matter. Please forward this point in particular to GARY GENSLER