Oct. 29, 2023
Jordan Boss 10/29/2023 Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Dear Securities and Exchange Commission, I write to express my concerns and provide feedback on the proposed rules regarding the safeguarding of advisory client assets. While I appreciate the Securities and Exchange Commission's efforts to enhance investor protections, there are certain areas within the proposal that require further consideration, particularly with regard to the privacy and security concerns associated with the custody of digital assets. One of the major concerns is the potential risk of identity theft. The proposal mandates the collection of user information for participants in decentralized finance (DeFi). Due to the lack of specific provisions addressing privacy and security measures, there is a risk of sensitive taxpayer information being stored without adequate safeguards. This could create vulnerabilities that may be exploited by bad actors, leading to identity theft and financial harm for investors. In the digital age, where cybersecurity threats are becoming increasingly prevalent, it is essential to prioritize privacy and data protection. The proposed regulations seem to overlook these critical aspects, potentially endangering investors' assets and personal information. Furthermore, the proposal should acknowledge the unique challenges associated with safeguarding digital assets. Crypto assets, such as cryptocurrencies, present novel challenges that require stringent security measures. The proposal should outline specific requirements for the protection and custodial handling of digital assets, as well as address the issue of demonstrating exclusive control over these assets. Without clear guidelines, there is a risk of mismanagement or unauthorized access, ultimately putting investor assets at risk. I would also urge the Securities and Exchange Commission to consider the unintended consequences that may result from imposing stringent reporting requirements. The collection of extensive personal information may inadvertently create opportunities for identity theft. It is crucial to strike a balance between improving regulatory oversight and safeguarding investor assets, without compromising individuals' privacy and security. In conclusion, I believe that the proposed rules regarding the safeguarding of advisory client assets are a step in the right direction. However, I highly encourage the Securities and Exchange Commission to take into account and address the privacy and security concerns associated with the custody of digital assets, particularly with regard to identity theft risks. By focusing on preserving investor privacy and implementing robust cybersecurity measures, we can ensure the protection of investor assets while fostering trust and confidence in the financial markets. Thank you for considering my comments. I trust that you will take them into account when finalizing the regulations pertaining to the safeguarding of client assets. Should you have any questions or require further clarification, please do not hesitate to reach out to me. Sincerely, Jordan