Oct. 30, 2023
Dear Securities and Exchange Commission, I, Lorcan Mac Fadden, am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have several concerns regarding the rule proposals that may impact the global competitiveness of the United States. Firstly, the SEC's proposed rule fails to adequately consider the unique properties of cryptocurrency, which is a rapidly growing and transformative asset class. The decentralized nature and technological complexities of cryptocurrency require a nuanced approach to regulation. Failure to do so not only imposes impractical regulatory requirements on investment advisers dealing with digital assets, but also hinders the United States' ability to remain competitive in a fast-evolving global marketplace. By treating digital assets in the same way as traditional securities and imposing strict control and custody requirements, the SEC risks stifling the growth of innovative cryptocurrency projects within the United States. Other jurisdictions have embraced digital assets and blockchain technology, creating more favorable regulatory environments for innovation and investment. The proposed rule, without appropriate adjustments, may put the United States at a disadvantage compared to these progressive jurisdictions. Furthermore, the increased reporting, compliance, and cost burdens imposed by the rule may disproportionately impact small entities and hinder economic growth in the digital asset space. The resources needed to fulfill these requirements may deter small businesses from entering the market or force existing ones to relocate to more accommodating jurisdictions. This would result in a loss of talent, innovation, and investment opportunities for the United States. To maintain the United States' global competitiveness, it is essential for the SEC to recognize the unique qualities of digital assets and adapt regulatory requirements accordingly. Collaboration with industry stakeholders, technologists, and legal experts is crucial in striking a balance between investor protection and enabling the growth and development of the digital asset market. It is imperative that the United States remains at the forefront of this rapidly evolving sector to attract talent, stimulate innovation, and foster economic growth. In conclusion, I urge the SEC to reevaluate the proposed rule in light of the global competitiveness of the United States. Taking into account the unique properties and potential of digital assets, the SEC should consider regulatory approaches that foster innovation while maintaining investor protection. Collaborative efforts with industry experts, both domestic and international, can help secure the United States' position as a global leader in the digital asset space. Thank you for considering my comments. Beest Regards Lorcan Mac Fadden