Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed "Safeguarding Advisory Client Assets" rule. While I acknowledge the need for investor protection and the mitigation of risks associated with custody of client assets, I believe that certain aspects of the proposed rule may exceed the SEC's regulatory authority and encroach on areas that should be regulated by other agencies. One area of concern is the treatment of digital assets or cryptocurrencies. These digital assets, built on blockchain technology, are transforming the finance industry. However, regulatory uncertainties surrounding these assets pose significant challenges. The recent case involving XRP and the SEC's handling of it has only served to showcase these uncertainties and the potentially detrimental effect on innovation and growth in this emerging space. The loss to XRP investors due to the SEC's actions highlights the need for regulatory clarity and a consistent approach. Instead, the SEC's proposed rule seems to exacerbate this lack of clarity and, in effect, wastes time and resources for both advisers and investors. It is crucial that the SEC provides clear guidance and establishes a framework that fosters innovation while protecting investors. Furthermore, I have reservations about the economic analysis and the potential costs associated with compliance. While enhancing investor protections is crucial, it is equally important to strike a balance that does not overly burden investment advisers or qualified custodians. A careful consideration of the potential costs and benefits of the proposed rule amendments, particularly for small entities, is essential. In conclusion, I urge the SEC to carefully reconsider the aspects of the proposed "Safeguarding Advisory Client Assets" rule that may exceed its regulatory authority and to collaborate with other agencies where necessary. Moreover, the SEC should continue to work towards providing regulatory clarity for digital assets, as the lack thereof hinders innovation and growth in this rapidly evolving sector. Thank you for considering my concerns. Sent from my iPhone