Oct. 22, 2023
Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Subject: Safeguarding Advisory Client Assets - Public Comment on Proposed Rule Dear Sir/Madam, I am writing to express my concerns regarding the proposed rule on Safeguarding Advisory Client Assets, as outlined in the notice issued by the Securities and Exchange Commission (SEC) on [insert date]. While I appreciate the SEC's effort to enhance investor protections and address gaps in the custody rule, I believe there are certain aspects of the proposal that require careful consideration and revision. Firstly, I would like to address the inconsistent regulatory treatment of decentralized exchanges (DeFi) under the proposed rules. The lack of consistent regulatory framework for these exchanges creates an environment of uncertainty and potential regulatory arbitrage. It is essential for the SEC to provide clear and comprehensive guidelines to ensure a level playing field for all participants in the crypto asset market. Failure to do so may result in unintended consequences, undermining the overall objectives of investor protection. Furthermore, I have concerns about the impact of the proposed regulations on identity theft risks within the decentralized finance sector. Under the proposed rules, participants in DeFi would be compelled to collect user information, potentially leading to the storage of sensitive taxpayer data without proper safeguards. This creates a substantial risk of identity theft, as it creates attractive targets for malicious actors under the guise of tax reporting. It is crucial for the SEC to strike a balance between investor protection and safeguarding sensitive information, while fostering innovation in the DeFi space. I urge the SEC to consider these concerns and take necessary steps to address them. It is imperative to ensure a coherent regulatory framework that promotes investor protection, mitigates operational risks, and fosters innovation in the rapidly evolving DeFi sector. By doing so, the SEC can strike the right balance between maintaining the integrity of the market and encouraging technological advancements. Thank you for considering my comments. I am hopeful that the SEC will take these concerns into account and work towards refining the proposed rule to better serve the interests of investors, market participants, and the economy as a whole. Sincerely, Aaron Rodgers