Subject: S7-04-23: Webform Comments from Anonymous
From: Anonymous
Affiliation:

Oct. 28, 2023

I am writing to express my strong opposition to the
proposed rule on "Safeguarding Advisory Client Assets" (SEC
Release No. IA-6675) put forth by the Securities and Exchange
Commission (SEC). This rule, in its current form, is deeply flawed and
poses significant risks to the advancement of decentralized finance
(DeFi), as well as the regulation of digital assets and
cryptocurrencies.

I adamantly believe that attempting to regulate decentralized finance
(DeFi) projects under the same framework as traditional custodians is
misguided and counterproductive. DeFi has emerged as a groundbreaking
industry that challenges the outdated financial system, providing
innovative solutions for financial inclusion and democratized access
to financial services. The proposed rule threatens to stifle
innovation and hinder the potential these projects have to
revolutionize the financial landscape. Imposing strict regulatory
requirements on DeFi protocols would impede progress and hinder the
societal benefits they can bring.

Furthermore, the proposed rule's approach to digital assets and
cryptocurrencies demonstrates a lack of comprehension of this emerging
technology. Such assets operate on decentralized networks, with the
custody and control mechanisms differing significantly from
traditional financial instruments. Imposing rigid regulations without
a nuanced understanding of digital assets is a regressive step that
hampers innovation and obstructs the growth of the digital asset
ecosystem.

I am deeply concerned about the negative impact that the proposed rule
may have on market participants utilizing digital assets or
cryptocurrencies. These instruments offer an array of advantages, such
as increased efficiency, transparency, and financial inclusion.
However, the regulatory uncertainties surrounding digital assets
create significant challenges for market participants, making it
difficult for them to operate and innovate within clear guidelines.
Instead of imposing onerous requirements, the SEC should work
collaboratively with industry stakeholders to develop appropriate
frameworks that foster innovation while ensuring investor protection.

In closing, I implore the Securities and Exchange Commission to
reconsider the proposed rule and take into account the potential
detrimental effects it may have on decentralized finance, digital
assets, and cryptocurrencies. It is essential to recognize the unique
characteristics of these emerging technologies and create regulations
that facilitate their growth while maintaining adequate investor
safeguards.

Thank you for considering my concerns. As I am deeply involved in this
field, I am open to providing additional public comments, addressing
different aspects of the rule, or answering any general questions you
may have regarding the proposal. It is crucial to approach these
discussions with a collaborative and forward-thinking mindset to shape
regulations that support innovation while safeguarding investor
interests.

Thank you