Oct. 23, 2023
Dear Sir/Madam, I am writing this public comment to express my concerns and reservations regarding the Securities and Exchange Commission's proposal 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 proposal that need further examination and consideration. In particular, I would like to emphasize two major concerns. Firstly, it is essential to address the lack of industry expertise in the drafting of this proposal. The SEC, being the regulatory authority responsible for oversight, must possess a deep understanding of the unique characteristics of the digital assets and cryptocurrency industry. Unfortunately, the proposal falls short in this regard. The digital assets market operates in a distinct manner with novel challenges and risks. The absence of experts with adequate knowledge and experience in this area could result in regulatory measures that inadvertently hinder innovation and growth. Therefore, I urge the SEC to seek advice and collaboration from experts and industry participants to ensure the proposed rules effectively address the specific considerations of digital assets and cryptocurrency. Secondly, I am deeply concerned about the privacy and safety implications associated with allowing numerous third parties access to my sensitive financial data and social security number. While the proposed rule aims to enhance safeguards for client assets, the extensive sharing of personal information brings about potential vulnerabilities. It is crucial to strike a balance between protecting client assets and preserving the privacy of individuals. Furthermore, the collection and storage of sensitive data by multiple custodians and advisers amplify the risks of unauthorized access, data breaches, and identity theft. Therefore, I implore the SEC to revisit and strengthen the provisions that safeguard individuals' privacy and ensure stringent data protection measures are in place. In conclusion, I believe it is paramount for the SEC to address the lack of industry expertise in the proposal drafting process to accurately capture the unique characteristics of the digital assets and cryptocurrency industry. Moreover, the potential risks associated with the extensive sharing of personal data must not be overlooked, and robust measures should be implemented to protect the privacy and security of individuals. Thank you for your attention to these concerns. I hope that as the SEC further deliberates on the "Safeguarding Advisory Client Assets" proposal, these issues will be carefully considered and appropriately addressed, ensuring a balanced regulatory framework that fosters investor protection while taking into account the industry's diverse needs. Sincerely, Simon Kurylo