Oct. 28, 2023
Dear Securities and Exchange Commission (SEC), I write to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets" put forth by the Securities and Exchange Commission (SEC). While I appreciate the SEC's objective of enhancing investor protection and addressing gaps in the custody rule, I have reservations about the potential negative impact of these rules on token offerings and digital assets. Without a doubt, digital assets, such as cryptocurrencies, have revolutionized the world of finance and offer unprecedented opportunities for capital formation and investment. However, this rapidly evolving field faces significant regulatory uncertainties, which can stifle innovation and undermine the United States' position as a leader in technological advancement. The proposed rule's approach towards digital assets warrants careful consideration. While it is essential to safeguard client assets, it is equally critical to promote an environment that fosters innovation and provides sufficient flexibility for companies to raise capital through innovative means, including token offerings. The current proposed rule, with its limited guidance on digital assets, may inadvertently hinder the growth of this industry. Drawing inspiration from the broader economic considerations outlined in the proposal, I request the SEC to carefully evaluate the potential impact of these rules on token offerings. It is imperative to strike the right balance between protecting investors and encouraging the development of new technologies. By doing so, the SEC can actively foster an environment that supports economic growth and ensures the United States remains at the forefront of digital innovation. Additionally, I urge the SEC to collaborate closely with industry stakeholders to align the rules with the unique characteristics of digital assets. Industry participants possess valuable insights and are well-positioned to provide guidance on best practices for safeguarding client assets in the digital context. Such collaboration will not only enhance investor protection but also demonstrate the SEC's commitment to engaging with market participants and adapting regulations to technological advancements effectively. I believe that amendments to existing rules should be made with a nuanced understanding of the digital asset market and the immense potential it holds. It is essential to avoid overly prescriptive regulations that stifle innovation, inhibit market growth, and deter investment. Striking the right balance—where investor protection is strengthened without unduly impeding innovation—can position the United States as a global leader in the digital asset industry. In conclusion, I urge the SEC to take into account the potential negative impact on token offerings and the growth of the digital asset sector when finalizing the proposed rule on the safeguarding of advisory client assets. By acknowledging the unique characteristics of digital assets and fostering an environment that encourages innovation while protecting investors, the SEC can serve as a model for effective and forward-thinking regulation. Thank you for considering my concerns. I trust that you will carefully evaluate the implications of these rules and prioritize the harmonious development of the digital asset industry. Sincerely, A Concerned U.S. Citizen