Dec. 24, 2020
Please select language in whatever definition the Commission uses to describe a "digital asset broker dealer" that is mindful of the inherent exemptions for corporate issuers who elect not to employ the services of a BD. Specifically im referring to the SCOTUS ruling in Ralston Purina that interpreted highly specific SEC language defining an Accredited Investor designation so broadly as to prevent the company from allowing its own employees to buy their own employers private securities. This error was only recently corrected by the commission. The potential exists here for a similar occurrence as the commission seeks to protect innovation with regard to 3rd party custody methodology. Currently a Business issuing a security under Reg CF need only maintain a digital captable that is also a transfer agent to satisfy custody requirements. It would be helpful to see this exemption reiterated for institutional investors concerned about their fiduciary responsibility when participating in these digital assets. The risk of a future governing body misinterpreting the intent of this new directive and forcing all digital assets into this new BD designation could either: A) prevent the ability of professional investors from investing in a Reg CF security or B) force all CF issuers to use one of the newly designated BDs if they hope to have professional investors. Which would eviscerate the burgeoning Portal category. The subject of custody is percieved by some who work with DLT to be a trick question. Its clear this request for commentary is an effort to ask the community for a way to reconcile existing law with the peer to peer transsction capabilities of digital assets. I'm not sure anything short of a custody exemtion for privately held digital assets can solve this riddle.