Oct. 14, 2023
Dear SEC, Thank you for reopening the opportunity for comments. As a holder and enthusiast of digital assets, I am writing to express concerns regarding the proposed changes to the custody rule's audit provision and their application to digital asset funds. While I appreciate the SEC's aims to improve investor protections, I respectfully submit that the proposed rules do not appropriately fit the unique nature of digital asset custody and accounting. As such, they present unnecessary burdens, stifle innovation, and harm the responsible development of this nascent industry. Specifically, the requirements for audited financial statements to conform to US GAAP do not map well to digital asset accounting, which is still evolving suitable practices. Attempts to force reconciliation with GAAP would be costly, operationally challenging, and result in less transparency, not more. The mandatory notification requirements also discourage auditors from working with good-faith digital asset firms, who remain committed to ethical practices despite regulatory uncertainty. This could severely limit service providers in a young industry. Furthermore, the substantial costs of complying with expanded audit rules could incentivize activity to shift to unregulated markets overseas, reducing US competitiveness. Overly stringent requirements also risk slowing development of custody solutions well-suited for digital assets' unique needs. While protecting investors is imperative, applying rules made for traditional assets could backfire in the digital asset space if not adapted appropriately. I urge the SEC to collaborate with industry experts to craft tailored policy that balances innovation and oversight. With a measured, flexible approach, we can democratize access to digital assets safely and responsibly. I welcome further discussion on crafting regulatory frameworks attuned to this rapidly evolving field. Prudent guardrails need not come at the expense of progress. I hope we can work together to both enrich and protect investors in this promising new ecosystem. I hope the SEC can appreciate that digital assets are a ray of hope for the less fortunate individuals who are eager to be successful, productive and helpful citizens of the USA and the world. The increasing costs of goods and services due to inflation and global crisis make it hard to get ahead for the average person. Please help to allow for a wide adoption of these assets and further innovation that will keep the USA at the forefront of this groundbreaking financial technology. Sincerely, Humble American Citizen