Oct. 30, 2023
Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549 Subject: Safeguarding Advisory Client Assets - Proposed Rulemaking Dear Sir/Madam, I am writing to express my concerns regarding the proposed rulemaking on Safeguarding Advisory Client Assets. While I acknowledge the Securities and Exchange Commission's (SEC) aim to enhance investor protections and address gaps in the custody rule, I believe there are certain aspects of the proposal that require further clarity and consideration. Specifically, my concern lies with the lack of clarity on the definition of digital assets. In today's rapidly evolving financial landscape, digital assets, including cryptocurrencies, have gained significant traction and transformed the way we perceive and engage with finance. However, the proposal fails to provide clear guidance on what constitutes a digital asset, leading to confusion and potential misinterpretation. Moreover, the regulatory uncertainties surrounding digital assets pose significant challenges and potential risks to investors. One prominent concern is the issue of privacy and identity theft on centralized exchanges. While decentralized finance (De-Fi) platforms, which operate on blockchain technology, provide a higher level of security by eliminating the risk of brokers losing user information, the proposal does not adequately address the unique needs and risks associated with digital assets. Additionally, I would like to raise concerns about potential overreach by the SEC in the crypto space. It is not uncommon for regulatory agencies to face criticism in their approach towards cryptocurrencies, as these assets often operate outside the traditional regulatory framework. Several prominent lawmakers, including Congressman Emmer, McHenry, and Davidson, have advocated for a fair and balanced regulatory environment that promotes innovation and protects everyday Americans. Furthermore, it is essential to highlight recent criticisms from members of the judiciary. Judge Sarah Netburn called out the SEC's "hypocrisy" and accused the agency of lacking a faithful allegiance to the law. Likewise, Judge Neomi Rao referred to the SEC's actions as "arbitrary and capricious." These comments underscore the need for careful consideration and adherence to the rule of law when regulating digital assets. Finally, I would like to draw attention to specific examples such as HEX, PulseChain, and PulseX, which are not securities. The holders of these assets deserve fair treatment, and it is my belief that the courts will rule in favor of these asset holders. In conclusion, I urge the SEC to address the concerns surrounding the lack of clarity on digital assets and to consider the potential overreach in the crypto space. It is crucial to cultivate a thoughtful and measured regulatory framework that balances investor protection, privacy, innovation, and adherence to the principles of law. I appreciate the opportunity to provide feedback on this proposed rulemaking and hope that my concerns are duly considered. Thank you for your attention to this matter. Sincerely, Anonymous