Oct. 25, 2023
To whom it may concern at the SEC I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets" from the Securities and Exchange Commission (SEC), outlined in Docket No. SEC-2021-0035. I have carefully reviewed the proposal and would like to express my concerns regarding the lack of industry expertise evident in the drafting of this rule. Specifically, I believe that the SEC does not have sufficient understanding of digital assets and cryptocurrency, which are increasingly prevalent in the financial industry. The unique characteristics of these assets require a nuanced approach that has been overlooked in the proposed rule. Digital assets, such as cryptocurrency, represent a groundbreaking innovation in finance. Built on blockchain technology, they offer new opportunities for investors and promise to transform traditional financial systems. However, regulatory uncertainties have posed significant challenges for this emerging industry. It is disheartening to find that the SEC's proposed rule does not adequately address the intricacies of digital assets. The proposed rule's inability to recognize the distinctive features of digital assets raises substantial concerns. For instance, the application of the rule to crypto assets and the challenges of demonstrating exclusive control indicate a lack of understanding of the underlying technology and the safeguards already in place within the industry. This oversight could potentially hinder the development and adoption of digital assets by legitimate market participants. I believe it is essential for the SEC to collaborate with industry experts and holders who possess in-depth knowledge of digital assets when formulating regulatory measures. By including diverse perspectives and expertise, the SEC can create rules that provide meaningful investor protections while still fostering innovation and growth. In conclusion, I respectfully urge the SEC to revise the proposed rule "Safeguarding Advisory Client Assets" to incorporate the necessary expertise in digital assets and cryptocurrency. This will ensure that the final rule is comprehensive, effective, and enhances investor protections without stifling innovation. Thank you for considering my comments. Sincerely, Jeffrey Kahn