Oct. 30, 2023
I, Sean Munley, am writing to submit my public comment in response to the proposed rule on "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I would like to express my concerns regarding the potential negative impact on investor access to digital assets and the associated privacy risks. Firstly, I am concerned that the proposed rules may restrict investor access to digital assets. Cryptocurrency represents an emerging asset class that has the potential to revolutionize our financial system. By imposing additional regulatory requirements and limitations on investment advisers, there is a risk of stifling innovation and hindering investor participation in this promising sector. It is crucial to strike a balance between investor protection and facilitating the growth of promising investment opportunities. Furthermore, the proposal raises privacy concerns. Allowing numerous third parties access to sensitive financial data and personal information, such as social security numbers, raises questions about the safety and confidentiality of such data. As we increasingly move towards digital platforms and technologies, it is essential to ensure robust privacy safeguards are in place to protect individuals' sensitive information. In addition to the highlighted concerns, I would like to bring attention to the potential benefits of exploring cryptocurrency as an alternative to traditional fiat currency. Our current monetary system faces challenges such as inflation and centralization, which can have profound consequences for individuals and the economy as a whole. Cryptocurrency offers the potential for a more stable and transparent financial alternative, as it operates through decentralized networks and blockchain technology. The inherent transparency and immutability of blockchain technology provide an additional layer of assurance for users, instilling trust and confidence in the currency. By embracing cryptocurrency, we can move towards a financial system governed by mathematical principles rather than subjective human decision-making, reducing the potential for economic instability caused by discretionary decisions made by a few individuals. While I understand that cryptocurrency is not without its risks, it presents an opportunity for innovation and diversification in the financial landscape. By exploring and regulating this emerging sector, the SEC can foster competition, promote innovation, and provide individuals with greater control over their financial well-being. It is essential to strike a balance between prudent regulation and allowing for the development and maturity of cryptocurrency as a legitimate alternative to fiat currency. It is crucial to recognize that the SEC's efforts to target specific cryptocurrencies for regulatory scrutiny could potentially hinder the organic growth and adoption of this emerging technology. The market, with its natural checks and balances, should play a primary role in determining which cryptocurrencies succeed or fail. However, this should not preclude the SEC from creating clear and fair regulatory frameworks that hold founders, development teams, and exchanges accountable for any fraudulent activities or misconduct. Striking a balance between fostering innovation and safeguarding investors is paramount, and the SEC's role should be to provide guidelines that promote responsible development and investment in the cryptocurrency space while allowing the market to determine winners and losers. In conclusion, I urge the SEC to carefully consider the potential negative consequences on investor access to digital assets and the associated privacy risks. Additionally, I emphasize the importance of exploring cryptocurrency as an alternative to traditional fiat currency, as it has the potential to provide a more transparent, predictable, and accountable financial system. Thank you for taking the time to consider my concerns. I trust that you will carefully review the public comments from all stakeholders and act in the best interest of the American people. Sincerely, Sean Munley