Oct. 28, 2023
Dear Sir or Madam, I am writing as a concerned U.S. citizen to provide my comments on the proposed rule "Safeguarding Advisory Client Assets" by the Securities and Exchange Commission (SEC). While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have several concerns regarding the lack of clarity on Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements for digital assets, such as cryptocurrency. It is evident that digital assets, including cryptocurrencies, have become an integral part of the financial landscape. However, the proposal does not provide clear guidance on AML and KYC requirements for digital assets, creating significant uncertainty for market participants. This uncertainty hampers the ability of investment advisers to properly safeguard client assets in the digital asset space. The lack of established AML and KYC protocols for digital assets is a critical issue that exposes investors and the market to heightened risks of illicit activities. The SEC must proactively address these concerns to ensure that investor protections are upheld in the evolving landscape of digital assets. Without clear guidelines, investment advisers may be unable to fully understand the risks associated with digital assets and adequately protect client assets from potential money laundering activities. To ensure investor protection, it is imperative that the SEC provides clear and comprehensive guidance on AML and KYC requirements applicable to digital assets. The SEC should work collaboratively with other regulatory bodies and industry stakeholders to establish a consistent framework for AML and KYC compliance in the digital asset space. This will promote transparency, deter illicit activities, and provide market participants with the necessary tools to safeguard client assets effectively. Furthermore, the SEC should take into account the unique characteristics of digital assets when formulating regulations. Digital assets, built on blockchain technology, offer inherent traceability and transparency that can aid in the detection and prevention of money laundering and fraud. By leveraging these technological advancements, the SEC can better ensure the integrity of the financial system while balancing investor protection and innovation. I urge the SEC to carefully consider the concerns raised regarding the lack of clarity on AML and KYC requirements for digital assets. The SEC's role in safeguarding client assets extends to the digital asset space, making it vital for the commission to provide clear and cohesive regulatory guidelines that facilitate compliance and foster investor confidence. Thank you for considering my comments on this important matter. Sincerely, A Concerned U.S. Citizen