Oct. 23, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets." While I understand the goal of enhancing investor protections and addressing gaps in the custody rule, I believe there are several aspects of the rule that need further consideration and addressing. One significant concern is the lack of consideration for privacy and security concerns, particularly when it comes to digital assets such as cryptocurrency. Blockchain-based digital assets, like cryptocurrency, have transformed the financial landscape, bringing about new opportunities for investors. However, the regulatory uncertainties surrounding these assets pose challenges and potential risks for investors. The proposal does not adequately address the unique privacy and security concerns associated with the custody of digital assets, leaving investors vulnerable to potential threats. The custody and safeguarding of digital assets require specific security measures and protocols to ensure the utmost protection for investors' assets. Without proper guidelines and requirements in place, the proposed rule puts investors' assets at risk. In my case, I specifically invested in the HEX token and the Pulsechain ecosystem, which are digital assets designed to be truly decentralized finance (DeFi) solutions. The uncertainty caused by ongoing SEC cases surrounding digital assets has had a detrimental impact on the value of my investment. Investors like me need assurance that the proposed rule will safeguard our investments and adequately address the specific challenges presented by digital assets. Furthermore, I believe it is essential for the SEC to provide greater clarity and guidance on how the proposed rule applies to digital assets, especially those built on blockchain technology. Digital assets like cryptocurrency are still relatively new and evolving, and their unique characteristics require specific considerations when it comes to custody and safeguarding. The SEC must work towards developing clear and practical guidelines that align with the decentralized nature of these assets. It is also crucial to ensure that the proposed rule does not unduly burden investment advisers and custodians who deal with digital assets. Compliance costs can significantly impact qualified custodians and may hinder competition and innovation within the industry. Striking the right balance between investor protection and the promotion of efficient, competitive markets should be a priority. In conclusion, I urge the SEC to carefully consider the concerns raised regarding the privacy and security of digital assets, particularly in the context of the proposed rule on safeguarding client assets. The growing popularity of cryptocurrencies and decentralized finance should not be disregarded, but rather embraced with thoughtful regulations that provide necessary protection for investors while encouraging innovation and growth. Thank you for the opportunity to comment on the proposed rule. I appreciate your attention to these important matters. Sincerely, Ole Bruch A concerned German citizen residing in Thailand -------------------------------------------------------------- [REDACTED] --------------------------------------------------------------