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 DeFi has emerged as a groundbreaking industry that challenges the outdated financial system, providing innovative solutions for financial inclusion and democratized access to financial services.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