Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule for safeguarding advisory client assets, specifically in relation to the lack of clarity on the definition of digital assets. Digital assets, such as cryptocurrencies, have emerged as a transformative force in the financial industry, leveraging blockchain technology to revolutionize the way we transact and store value. However, the regulatory landscape surrounding these assets remains complex and uncertain. The proposed rule should provide clear guidance on what constitutes a digital asset, taking into consideration the unique characteristics and functionalities of this rapidly evolving asset class. Without a clear definition, there is a risk of misinterpretation and confusion among investment advisers, potentially leading to unintended consequences and hindering innovation. For instance, the digital assets HEX, PulseChain, and PulseX should not be considered securities and thus should not fall under the scope of the proposed rule. These assets are part of the decentralized finance (DeFi) ecosystem, offering independent and autonomous financial services without intermediaries. Applying the proposed rule to these assets would only stifle innovation and restrict access to innovative financial solutions for investors. Therefore, it is crucial that the Securities and Exchange Commission provides clear and comprehensive guidance on the definition of digital assets, taking into account their unique characteristics and use cases. This will ensure that investment advisers can navigate the regulatory framework effectively, provide appropriate safeguards for client assets, and foster continued innovation in the digital asset space. Thank you for considering my concerns. I strongly urge you to address the lack of clarity surrounding the definition of digital assets in the final rule. This will not only provide regulatory certainty but also pave the way for the growth and development of the digital asset industry, contributing to the overall advancement of the financial sector. Sincerely, Jack Levitt