Oct. 28, 2023
Dear Securities and Exchange Commission, I felt compelled to take a moment to express my concerns regarding the proposed rule on Safeguarding Advisory Client Assets that was recently published. As a concerned U.S. citizen, I find it disconcerting that there appears to be a lack of clarity when it comes to addressing the anti-fraud measures for digital assets. While I understand that digital assets, particularly cryptocurrencies, present unique challenges in terms of regulatory oversight, it is crucial that the SEC provides comprehensive guidance to address the risks associated with their custody. This includes the need for robust and explicit instructions on how to safeguard these assets against fraudulent activities. Unfortunately, the proposed rule falls short in providing clear and explicit instructions to effectively safeguard digital assets. By omitting specific guidance, it creates potential loopholes that unscrupulous individuals may exploit to take advantage of this rapidly expanding market. I must emphasize that it is within the SEC's mandate to protect investors and ensure the proper functioning of the capital markets. Failing to address the full magnitude of risks associated with digital assets not only leaves investors vulnerable to fraud but also undermines the credibility of the regulatory framework governing the advisory industry. Additionally, it is disappointing that the proposal does not prioritize the establishment of advanced reporting mechanisms and the adoption of technological solutions to enhance transparency and detect fraudulent activities within digital asset custody. As the digital asset market continues to experience swift growth, it is vital for the SEC to remain proactive in adapting regulatory practices to confront emerging threats adequately. To effectively address the challenges posed by digital assets, I strongly urge the SEC to collaborate with relevant stakeholders, including market participants and technology experts. It is only through such collaboration that practical, effective, and future-proof anti-fraud measures can be developed. This approach will not only protect investors but also foster innovation and attract capital to the growing digital asset market. In conclusion, I implore the SEC to revise the proposed rule on Safeguarding Advisory Client Assets to provide explicit clarity on the anti-fraud measures necessary for digital assets. By doing so, the SEC will demonstrate its steadfast commitment to protecting investors and facilitating the responsible development of the digital asset market. Thank you for considering my comments, and I hope that the SEC will take these concerns seriously. As an engaged citizen, I am dedicated to supporting the SEC's efforts to safeguard investor interests. Sincerely, A Concerned U.S. Citizen