Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my deep dissatisfaction with the way Hex (and other similar digital assets) has been treated under the proposed rule on safeguarding advisory client assets. It is evident that the current treatment of Hex as a security is unfair and brings about significant challenges for both market participants and the growth of transformative technologies. Hex, unlike traditional securities, does not meet the criteria for classification as a security. It is important to recognize and appreciate the unique characteristics and nature of digital assets like Hex, and not subject them to the same regulatory framework as traditional securities. Treating Hex as a security stifles innovation and creates unnecessary barriers for the development of the burgeoning digital asset space. Furthermore, it is crucial that regulatory guidelines provide equal treatment for all digital assets. It is not fair to burden certain digital assets, such as Hex, with stringent regulations while allowing others like Bitcoin and Ethereum to benefit from a more favorable regulatory environment. Consistency and fairness are essential when applying regulations to ensure a level playing field for all market participants. I would also like to highlight the importance of protecting investor funds held on cryptocurrency exchanges, like Coinbase, which play a crucial role in handling and securing assets. Proper regulatory oversight can foster transparency, reduce fraudulent activities, and promote responsible use of digital assets, instilling investor confidence in the market. As the SEC strives to enhance investor protections, I urge consideration of the economic impact of the proposed rule on both investors and the industry as a whole. Achieving a balance between investor protection and reasonable regulatory requirements is necessary to avoid placing an undue burden on practitioners and to foster a competitive and efficient market environment. Therefore, a comprehensive analysis of the economic effects, including the benefits, costs, and implications for efficiency and capital formation, must be undertaken. In conclusion, I strongly urge the SEC to reevaluate how Hex and other similar digital assets are treated under the proposed rule. The current treatment is unfair and hampers innovation in the digital asset space. Additionally, I emphasize the importance of protecting investor funds held on cryptocurrency exchanges and urge careful consideration of the economic impact of the proposed rule. Thank you for considering my comments on this crucial matter. Sincerely, Anonymous