Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my comments on the proposed rule "Safeguarding Advisory Client Assets" (Release No. IA-6384; File No. S7-04-23) from the Securities and Exchange Commission (SEC). While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have significant concerns regarding the burden that the proposed rule places on small businesses and startups, particularly in the digital asset industry. The SEC's proposed rule includes additional reporting requirements that would require small businesses and startups, who would not otherwise be required to track personal identifiable information, to implement such tracking. This would undoubtedly create additional costs and administrative burdens for these entities. As we are all aware, startups and small businesses often operate on limited budgets, with resources dedicated towards innovation and growth. The introduction of such reporting requirements will divert already limited resources towards compliance, hindering these entities' ability to innovate and thrive. Furthermore, these additional costs and administrative burdens have the potential to put small businesses and startups in the digital asset industry at a disadvantage compared to larger, more established players. Innovation and competition in this industry are vital for providing investors with diverse investment options and driving economic growth. By imposing disproportionate burdens on small entities, the proposed rule risks stifling innovation and limiting the entry of new players into the market. I believe that the SEC should carefully consider the potential impact of the proposed rule on small businesses and startups, particularly in the digital asset industry. It is crucial to strike a balance between investor protection and fostering an environment conducive to innovation and growth. While investor protection is of paramount importance, it should not come at the expense of hindering small businesses and startups that are driving innovation in the digital asset industry. In conclusion, I urge the SEC to reconsider the burden that the proposed rule places on small businesses and startups in the digital asset industry. The additional costs and administrative burdens associated with the proposed reporting requirements have the potential to stifle innovation and growth, which ultimately hinders competition and limits the options available to investors. I encourage the SEC to find a more balanced approach that addresses investor protection while fostering an environment conducive to innovation and growth for small businesses and startups. Thank you for considering my comments.