Oct. 23, 2023
Dear Securities and Exchange Commission, I am submitting this public comment to express my concerns regarding the proposed regulations for safeguarding advisory client assets. While I appreciate the SEC's intent to enhance investor protections and address gaps in the custody rule, I believe there are certain aspects of the proposed rule that require careful consideration and revision. One major concern I have is the inadequate consideration of the unique properties of cryptocurrency. The proposed regulations fail to fully grasp the decentralized nature and technological complexities of cryptocurrency, resulting in impractical regulatory requirements. The ambiguous definition of terms like "platform," "software," and "ledger" leaves room for multiple interpretations and increases regulatory uncertainty. Furthermore, the definition of terms such as "wallet" and "validator" does not reflect their technical meaning, creating confusion and hindering compliance efforts. Another significant issue is the presence of poorly defined terms throughout the proposed regulations. This lack of clarity could have far-reaching consequences and lead to inconsistent interpretations and application of the rule. It is crucial for the SEC to provide clear and precise definitions to ensure that investment advisers can effectively comply with the requirements. Without such clarity, there is a risk that inadvertent non-compliance would occur due to misunderstandings and misinterpretations. Additionally, it is essential to address the potential confusion arising from the terminology used in the proposal. The inclusion of undefined terms and the use of technical jargon without proper definitions may create obstacles for investment advisers who are already grappling with understanding the complexities of the industry. By providing precise and well-defined terminology, the SEC can mitigate unnecessary confusion and ensure effective compliance across the board. In conclusion, the proposed regulations for safeguarding advisory client assets have considerable merit in enhancing investor protections. However, it is crucial for the SEC to reevaluate the regulatory requirements concerning cryptocurrency and address the concerns regarding the poorly defined terms used in the proposal. By providing clearer definitions and considering the unique properties of cryptocurrency, the SEC can foster a regulatory environment that strikes a balance between protection and practicality. Thank you for considering my comments and allowing concerned individuals like myself to provide input on this important matter. Sincerely, Alan Moore [REDACTED]