Subject: S7-04-23: Webform Comments from Mathias Field
From: Mathias Field
Affiliation:

Oct. 30, 2023

Public Comment: Safeguarding Advisory Client Assets

To whom it may concern,

I am writing as a concerned individual regarding the proposed rule on
"Safeguarding Advisory Client Assets" by the Securities and
Exchange Commission (SEC). While I appreciate the aim to enhance
investor protections and address gaps in the custody rule, I have
several concerns regarding the potential negative impact of these
proposed regulations.

One key issue I wish to address is the potential negative impact on
token liquidity. The proposed rules may inadvertently hinder token
liquidity, making it more difficult for investors to buy and sell
tokens. As the blockchain ecosystem continues to grow and evolve, it
is crucial to ensure that regulations do not stifle innovation and
market liquidity.

Additionally, the timing of the proposed regulations raises concerns.
It appears that these rules will come into effect before companies and
protocols are able to adequately accommodate them. It is important to
provide adequate time for market participants to adjust and implement
necessary changes to their systems and processes. Rushing these
regulations without sufficient preparation could lead to unnecessary
disruption and unintended consequences.

Furthermore, I would like to raise the issue of the impact abroad. The
SEC's jurisdiction extends beyond U.S. borders, and it is
essential to consider the potential impact of these regulations on
international markets. The global nature of the blockchain industry
requires a thoughtful approach to regulation that takes into account
the interconnectedness of different jurisdictions and their regulatory
frameworks. Harmonization and coordination among regulatory bodies
will be crucial to avoid regulatory arbitrage and promote fair market
practices.

Lastly, I am concerned about the SEC's track record in
intervening with economies and communities it may not fully
understand. While investor protection is a paramount goal, it is
crucial that regulations do not inadvertently hinder innovation and
growth. It is important to strike a balance between safeguarding
investor interests and fostering an environment conducive to economic
development and technological advancements.

In conclusion, while I appreciate the SEC's effort to enhance
investor protections and address custody rule gaps, I have outlined
several concerns regarding the potential negative impacts of the
proposed rules. It is crucial to carefully consider the potential
consequences, including the impact on token liquidity, the timing of
implementation, the global impact, and the unintended consequences of
regulatory intervention. A balanced approach that promotes investor
protection while fostering innovation and growth is essential.

Thank you for considering my comments. I urge the SEC to thoroughly
evaluate and address these concerns before finalizing the proposed
rule. I believe that together we can achieve a regulatory framework
that protects investors while fostering a vibrant and innovative
advisory industry.

Sincerely,

Mathias Field