Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my comments on the proposed rule "Safeguarding Advisory Client Assets". While I appreciate the efforts of the SEC to enhance investor protections and address gaps in the custody rule, I have some concerns regarding the scope of the rule and its impact on certain assets, particularly digital assets or crypto. Firstly, I would like to express my disappointment with the inadequate consideration of self-custody solutions in the proposed rules. Self-custody solutions, such as wallets or decentralized finance platforms, have emerged as viable options for investors to exercise greater control over their assets. However, the proposed rules do not seem to take into account the potential benefits of these solutions, hindering the development of user-controlled asset management. Digital assets, like cryptocurrency, have significantly transformed the financial landscape, offering new opportunities for investors. However, the regulatory uncertainties surrounding digital assets pose challenges for both investors and investment advisers. It is crucial for the SEC to carefully consider the unique characteristics and features of digital assets to ensure that the rule adequately addresses the specific risks and challenges associated with this asset class. Furthermore, the proposed amendments concerning digital assets must provide clarity on how investment advisers can effectively demonstrate exclusive control over these assets. Given that digital assets are often stored on blockchain networks which involve multiple parties, the requirement of exclusive control becomes more complex. It is essential for the SEC to develop clear guidelines and standards to ascertain the security and control of digital assets when held by investment advisers. Moreover, I believe that the proposed rules could unnecessarily burden investment advisers by restricting their ability to hold certain digital assets. While investor protection is paramount, it is crucial to strike a balance that allows for innovation and growth in the digital asset space. Restrictive custody requirements may hinder the provision of advisory services in this emerging market and limit investor access to these promising assets. The SEC should not overlook the potential benefits and risks associated with digital assets. Failure to provide clear and appropriate regulatory frameworks could impede the growth and development of the digital asset industry, affecting both investors and investment advisers. In conclusion, it is imperative for the SEC to ensure that the proposed rule adequately considers self-custody solutions and addresses the unique characteristics of digital assets. By doing so, the SEC can provide comprehensive investor protections while fostering innovation and growth in the digital asset space. I urge the SEC to carefully review and address these concerns in the final rule. Thank you for the opportunity to provide my comments. Sincerely, Anonymous Sent with Proton Mail secure email.