Oct. 28, 2023
Dear Sir/Madam, I am writing to provide my comments and concerns regarding the Securities and Exchange Commission's (SEC) proposed rule on "Safeguarding Advisory Client Assets." While I appreciate the SEC's objective of enhancing investor protections and addressing gaps in the custody rule, I believe that the proposed rule fails to adequately consider the principles of freedom and the American way. As a strong advocate for innovation and economic freedom, I firmly believe that regulation should be balanced, practical, and avoid unnecessary burden on market participants. The proposed rule, particularly when applied to digital assets such as cryptocurrencies, imposes impractical and burdensome requirements that stifle technological advancements and hinder market growth. The unique properties of digital assets, particularly cryptocurrencies based on blockchain technology, should be taken into account when formulating custodial arrangements. It is essential for regulatory bodies like the SEC to recognize the decentralized nature and technological complexities of cryptocurrency. Imposing traditional custodial requirements, without considering the distinctive characteristics of digital assets, hinders innovation and undermines the freedom to participate in emerging markets and technologies. Furthermore, the proposed rule fails to provide clear guidance on how investment advisers can comply with the safeguarding requirements concerning cryptocurrencies. The SEC should work to strike a balance by providing clear guidelines and allowances that ensure investor protection while enabling the efficient functioning of digital asset markets. Flexibility and adaptability in the regulatory framework will foster innovation, promote market competition, and ultimately benefit investors. Moreover, it is crucial to avoid adopting a one-size-fits-all approach, especially when regulating digital assets. The dynamic and rapidly evolving nature of this industry calls for a regulatory framework that is responsive, adaptable, and oriented towards promoting economic freedom and the American way. Regulatory hurdles that hinder market participants from fully utilizing digital assets will ultimately weaken the competitiveness of the United States in the global marketplace. In conclusion, I urge the SEC to reconsider the proposed rule on safeguarding advisory client assets and take into account the principles of freedom, innovation, and the American way. A balanced and practical regulatory framework will not only enhance investor protections but also encourage market growth and technological advancements. Sincerely,