Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns about the proposed rule on "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I believe there are certain aspects of the rule that require further consideration and revision. Firstly, I would like to focus my concerns on the inadequate consideration of the unique properties of cryptocurrency. The SEC's proposal does not sufficiently take into account the decentralized nature and technological complexities of cryptocurrency, leading to impractical regulatory requirements. This could impose significant burdens on investment advisers who handle crypto assets, hindering innovation and slowing down technological advancements in this rapidly evolving field. Furthermore, I am deeply worried about the impact these proposed regulations may have on small businesses and start-ups. The reporting requirements outlined in the rule would necessitate small businesses and start-up protocols, who would not otherwise be required to track personally identifiable information, to implement such tracking. This additional compliance burden is not only costly but also time-consuming, diverting resources and attention away from core business activities. It could put these projects at a disadvantage and stifle innovation and economic growth. Additionally, the excessive compliance costs associated with the proposed rule could disproportionately affect smaller firms, making it harder for them to compete in the market. These added expenses may discourage potential entrants into the industry and limit choices for investors. It is crucial to strike a balance between investor protection and easing the regulatory burden on small businesses, particularly as they play a vital role in fostering innovation and driving economic growth. In light of these concerns, I urge the SEC to carefully reconsider the proposed rule and make necessary revisions. It is essential to ensure that the regulatory regime strikes the right balance between investor protection and facilitating innovation. A nuanced approach that considers the unique challenges posed by cryptocurrency, as well as the impact on small businesses, will not only drive technological advancements but also bolster economic growth and maintain a vibrant investment landscape. Thank you for considering my public comment. Please feel free to reach out to me if you require any further clarification or information. Sincerely,