Oct. 30, 2023
Dear SEC, I am writing to express my concerns regarding the proposed rule titled "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protection and address gaps in the custody rule, there are several aspects of the proposal that require further clarity and careful consideration. One area of concern is the lack of clarity in defining digital assets. The proposal does not provide clear guidance on what constitutes a digital asset, which can lead to confusion and potential misinterpretation. Given the transformative nature of digital assets, such as cryptocurrencies built on blockchain technology, it is crucial to establish a comprehensive and precise definition in order to facilitate regulatory compliance and ensure appropriate safeguards for investor assets. Moreover, privacy concerns and the risk of identity theft on centralized exchanges are pressing issues related to digital assets. While true decentralized finance (De-Fi) platforms offer enhanced security measures that protect user information, the proposed rules do not adequately address these concerns. It is crucial for regulatory frameworks to acknowledge the value and safety provided by decentralized platforms, rather than subjecting them to undue regulatory burdens that hinder their ability to effectively mitigate the risk of privacy breaches. I am also concerned about the potential overreach of the SEC in the crypto space. It is essential that regulatory bodies strike a balance between protecting investors and fostering innovation. Several members of Congress, including Congressman Emmer, McHenry, and Davidson, have voiced their concerns regarding the SEC's approach to regulating digital assets. Judge Netburn recently criticized the SEC's "hypocrisy" and noted that the agency lacks a faithful allegiance to the law. Judge Neomi Rao also highlighted the arbitrary and capricious actions of the SEC. These judicial assessments raise important questions about the SEC's regulatory practices concerning digital assets. Furthermore, it is worth noting that certain digital assets such as HEX, PulseChain, and PulseX are not securities. XRP is not a security per court ruling and you literally harmed XRP investors. Now you have harmed HEX, PulseChain, PulseX investors. Many holders of these assets believe that the courts will rule in their favor, pointing to recent legal rulings casting doubt on the SEC's approach. In light of these concerns, I urge the SEC to ensure that any regulatory measures in the crypto space strike an appropriate balance between protecting investors and fostering innovation. It is vital to consider the diverse viewpoints and expert opinions from both the judicial and legislative branches, as well as the crypto community, to ensure a comprehensive and fair regulatory approach. In conclusion, I appreciate the SEC's efforts to enhance investor protection through the proposed rule. However, I urge the SEC to provide clearer definitions for digital assets, address privacy concerns associated with centralized exchanges, and carefully consider the potential negative impacts of regulatory overreach in the crypto space. It is important to safeguard investor assets while promoting innovation and ensuring a fair and transparent regulatory environment. Thank you for considering my comments. Sincerely, Anonymous