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