Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule, "Safeguarding Advisory Client Assets," which aims to enhance investor protections and address gaps in the custody rule. While I appreciate the SEC's efforts to safeguard client assets, I have concerns regarding the burden placed on exchanges to monitor and report suspicious activities, particularly in relation to the pseudonymous nature of blockchain transactions. As stated in the proposal, the rule seeks to enhance the protection of client assets by addressing how investment advisers safeguard these assets, including crypto assets. However, the requirement for exchanges to monitor and report suspicious activities can impose significant challenges. Blockchain transactions are often pseudonymous, making it difficult to reliably identify the parties involved and determine whether an activity is genuinely suspicious or not. The proposal highlights the importance of demonstrating exclusive control over client assets, as well as the challenges in doing so for crypto assets. This poses a nuanced issue, as crypto assets are designed to be decentralized, with multiple parties holding varying levels of control over the assets. Imposing an onerous monitoring and reporting burden on exchanges may hinder the development and adoption of these innovative technologies, potentially stifling growth and limiting the financial opportunities they present. It is crucial to strike a balance between investor protection and the advancement of technology and financial innovation. Encouragingly, the proposal recognizes the need to consider reasonable alternatives and welcomes public input on overlooked benefits and costs. In this light, I urge the SEC to carefully consider the potential impact these monitoring and reporting requirements will have on exchanges, particularly in relation to the pseudonymous nature of blockchain transactions. To address this concern, I suggest that the SEC collaborates closely with industry experts, technology providers, and exchanges to devise alternative methods for monitoring and reporting suspicious activities related to blockchain transactions. By working together, it may be possible to develop innovative solutions that ensure client asset protection while minimizing burdens on exchanges. This could include exploring methods such as data analytics, machine learning, and implementing industry-wide best practices. Furthermore, the SEC should engage in international cooperation and coordination with regulatory bodies and standards-setting organizations to develop consistent guidelines and standards for monitoring and reporting suspicious activities in the blockchain space. This will provide greater clarity and certainty for exchanges operating on a global scale, which is vital for promoting fair competition and facilitating innovation. Additionally, the SEC should consider providing resources and guidance to exchanges to support their efforts in monitoring and reporting suspicious activities. Educational programs, workshops, and industry-led initiatives can help build the necessary knowledge and expertise within exchanges to navigate the challenges associated with pseudonymous blockchain transactions. By investing in education and awareness, regulators can empower exchanges to fulfill their obligations while reducing the compliance burden. In conclusion, while the SEC's proposed rule on safeguarding advisory client assets is designed to protect investors, the burden placed on exchanges to monitor and report suspicious activities in the blockchain space may be challenging and counterproductive. I urge the SEC to explore reasonable alternatives, engage in international cooperation, and provide supportive resources to exchanges to ensure investor protection while fostering innovation. Thank you for considering my input on this vital matter. Sincerely, Phil Lawrence