Subject: Public Comment for File Number S7–04–23
From: Brad Klein
Affiliation:

Oct. 15, 2023

According to the Mission page on the SEC website, one of the key aspects
of the SEC’s mission is “Facilitating Capital Formation.” I argue the
new rule “Safeguarding Advisory Client Assets” goes against the SEC’s
mission.

The costs of complying with the new security requirements will
discourage some investment advisers from dealing with cryptocurrencies
at all. Furthermore, these increased costs put a burden on smaller firms
and may put them out of business, even though the SEC’s mission page
suggests your goal is to help small businesses: “Access to capital is
particularly critical for small businesses, which create approximately
two-thirds of all new jobs in the U.S. economy.”

Investment advisers may be forced to cease managing crypto assets on
behalf of clients. The proposed rule will increase costs to investment
advisers and clients. This would go against a key facet of the SEC’s
mission: “Facilitating Capital Formation.”

While the intent to protect investors is good, the rule will
unintentionally restrain cryptocurrency advancement and acceptance, and
contradicts the SEC’s mission.