Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule "Safeguarding Advisory Client Assets" (File Number S7-04-23). Specifically, I am deeply concerned about the lack of clarity on token custody by investment advisers. In today's rapidly evolving financial landscape, digital assets, such as cryptocurrency, built on blockchain technology, have transformed the way we perceive and engage with finance. However, this innovative technology also brings forth regulatory uncertainties that can create significant challenges for investment advisers. The proposal falls short in providing clear guidance on token custody by investment advisers, resulting in a lack of clarity and potential compliance difficulties. With the increasing popularity and adoption of digital assets, it is critical to establish comprehensive regulations that ensure investor protection while still fostering innovation and market growth. The SEC should prioritize addressing how investment advisers can effectively safeguard digital assets, including cryptocurrencies, while maintaining regulatory compliance. Clear guidelines on custody practices in relation to tokens will provide much-needed certainty for investment advisers and their clients. Additionally, the proposal should take into account the unique nature of digital assets and recognize the existing best practices employed by industry participants. Collaboration and consultation between the SEC and industry experts can result in a more nuanced and effective regulatory framework. It is imperative that any regulations governing token custody strike a balance between investor protection and supporting the growth of this transformative industry. By providing clear guidance and regulatory certainty, the SEC will foster innovation, promote investor confidence, and ensure a fair and transparent market for digital assets. I urge the SEC to carefully consider the concerns raised regarding the lack of clarity on token custody by investment advisers in the proposed rule. A comprehensive and well-defined regulatory framework will benefit not only investors but also the continued development and advancement of the digital asset ecosystem. Thank you for your attention to this matter. Sincerely, Filip Igor Starz