Dear Sir/Madam, I am writing to submit a public comment on the proposed rule "Safeguarding Advisory Client Assets" (File Number: S7-30-20) by the Securities and Exchange Commission. While I appreciate the SEC's intent to enhance investor protections and address gaps in the existing custody rule, I have several concerns regarding the proposed rule's impact on exchanges and their ability to verify ownership of digital assets. First and foremost, I believe that the burden placed on exchanges to verify ownership of digital assets could prove to be overly onerous, particularly for certain types of assets. Digital assets, such as cryptocurrencies, often rely on decentralized systems and blockchain technology, which inherently present challenges in tracing ownership. Implementing strict verification protocols on exchanges may pose significant operational difficulties and impose excessive costs, ultimately hampering the smooth operation of these platforms. Additionally, it is important to consider that digital assets are still a relatively nascent and rapidly evolving class of investments. The proposed rule's requirement may not align well with the dynamic nature of digital asset ownership. Whether it be cross-chain transactions or the use of decentralized finance protocols, the landscape of digital asset ownership is continuously evolving. Imposing rigid verification processes on exchanges risks stifling innovation and hindering the growth potential of this emerging market. I would also like to emphasize the need for a proportionate approach that balances investor protection with the practical realities of verifying ownership. It is crucial that any requirements placed on exchanges to verify ownership of digital assets are reasonable, taking into consideration the unique characteristics of this asset class. Striking a balance between investor protection and the facilitation of innovation is of utmost importance. Furthermore, I urge the SEC to closely collaborate and engage with the industry stakeholders, including exchanges and other relevant entities, when devising regulations related to digital assets. By involving industry experts, the SEC can gain valuable insights into the challenges faced by exchanges and work towards practical solutions that enhance investor protections while considering the unique aspects of the digital asset ecosystem. In conclusion, while I support the goal of enhancing investor protections, mandating exchanges to verify ownership of digital assets requires careful consideration and a balanced approach. The SEC should work closely with industry stakeholders to develop requirements that are both effective in safeguarding client assets and practical for exchanges to implement. I trust that the SEC will carefully weigh these concerns and ensure that the proposed rule strikes the appropriate balance between investor protection and the operational realities of exchanges. Thank you for considering my comments on this important issue. Sincerely, Phil Lawrence