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

Oct. 29, 2023

A couple points about S7-04-23 Safeguarding Advisory
Client Assets. Consider this.
The rule may not consider the needs and preferences of retail
investors, who may want more access to these innovative technologies.
The rule may not consider the potential for digital assets to
facilitate cross-border payments and remittances.
The rule may not consider the ethical implications of digital assets,
such as their impact on labor markets or income inequality.
The rule may not adequately protect against money laundering or
terrorist financing activities.
The rule may create a competitive disadvantage for US-based digital
asset businesses, as foreign competitors may not face similar
regulations.
The rule may not consider the potential for digital assets to disrupt
traditional financial intermediaries or services.
The rule may not address the challenges of verifying the authenticity
or provenance of digital assets, which can be easily duplicated or
forged.
The rule may not be consistent with the values of openness,
inclusivity, and decentralization that underlie much of the digital
asset movement.
The rule may disproportionately impact certain demographic groups,
such as minorities or women-owned businesses.
The rule may not consider the risks associated with decentralized
autonomous organizations (DAOs), which are becoming increasingly
popular in the digital asset market.
The rule may be overly prescriptive and inflexible, making it
difficult for innovators to develop new products and services.
The rule may not consider the potential for digital assets to reduce
corruption or bribery in public institutions.
The rule may create barriers to entry for smaller players in the
digital asset space, who may not have the resources to comply with the
requirements.
The rule may not promote diversity and inclusion in the digital asset
industry, as it could favor larger, more established players over
smaller, more innovative ones.
The rule may not be sufficiently dynamic or agile to respond to rapid
changes in the digital asset market.
The rule may not be practical or feasible to implement, given the
limited resources and expertise available to many digital asset
businesses.
The rule may not adequately consider the perspectives of indigenous
communities or other marginalized groups affected by the digital asset
market.
The rule may not consider the risks associated with Initial DEX
Offerings (IDEOs), which are gaining popularity in the digital asset
market.
The rule may not address the challenges of scaling up digital asset
networks and infrastructure to meet growing demand.
The rule may not consider the potential for digital assets to improve
financial literacy or educational opportunities for young people.
The rule may discourage investment in digital assets by institutional
investors, who are critical to the growth and development of the
industry.
The rule may not consider the potential for digital assets to
revolutionize the way we store and transfer value globally.
The rule may not address the risks associated with smart contracts or
other programmable applications.
The rule may not consider the potential for digital assets to improve
supply chain management or traceability of goods and services.
The rule may not be technologically neutral, as it may favor certain
types of digital assets or platforms over others.
The rule may not provide enough clarity or predictability for
companies to plan their future strategies and investments.
The definition of "custody" may be too broad or vague,
leading to confusion and inconsistency in its application.
The rule may not be enforceable, as it relies on self-reporting and
attestations rather than independent verification.
The rule may not consider the potential for digital assets to enhance
transparency and accountability in government spending and
procurement.
The rule may not take into account the needs of unbanked or
underbanked populations who may benefit from using digital assets.
The rule may not consider the potential for digital assets to
transform the way we manage our personal data and identity online.
The rule may not be transparent or accessible to non-experts, making
it difficult for ordinary people to understand and participate in the
digital asset market.
The rule may not consider the role of digital assets in supporting
charitable giving or philanthropic initiatives.
The rule may not be consistent with the principles of fair competition
and free trade in the digital asset market.
The rule may not be responsive to feedback from industry experts or
academic researchers on digital asset regulation.
The rule may not be appropriate for digital assets that do not meet
the definition of "securities, " such as utility tokens or
stablecoins.
The rule may not provide enough incentives for companies to invest in
research and development of new technologies or applications.
The rule may not provide enough support or guidance for startups and
small businesses in the digital asset space.
The rule may not align with international standards or best practices
for digital asset regulation.
The rule may not consider the impact of climate change or
sustainability on digital asset mining and trading.
The rule may not consider the social and economic impacts of its
implementation, such as job creation or community development.
The rule may not be consistent with the principles of due process and
procedural justice in adjudicating disputes or enforcing penalties.
The rule may not provide enough support for public-private
partnerships or collaborative efforts to promote responsible digital
asset adoption.
The rule may not acknowledge the importance of digital assets in
supporting human rights and democratic processes worldwide.
The rule may not adequately protect consumers' privacy rights, as
it could require the sharing of sensitive personal information with
regulators.
The rule may not provide enough incentives for companies to adopt
responsible governance practices, such as diversity and inclusion
policies.
The rule may not consider the role of digital assets in combating
corruption or promoting political stability in emerging economies.
The rule may not provide enough oversight or supervision of digital
asset exchanges and trading platforms.
The rule may not adequately protect against manipulation or price
distortions in digital asset markets.
The rule may create perverse incentives for companies to move their
operations outside of the United States to avoid regulation.
The rule may not be proportional to the actual risks faced by digital
asset users and investors.
The rule may be based on outdated assumptions about how digital assets
work and what risks they pose.
The rule may not account for the global nature of the digital asset
market, which requires coordination with regulators from other
countries.
The rule may not consider the potential for digital assets to increase
financial inclusion in remote or rural areas.
The rule may not consider the environmental impacts of digital asset
mining and trading.
The rule may not adequately protect against scams or pump-and-dump
schemes targeting unsophisticated investors.
The rule may not consider the long-term implications of its
implementation, such as its impact on the future growth of the digital
asset market.
The rule may not be aligned with other financial sector reforms aimed
at promoting stability and resilience.
The rule may not take into account the varying levels of knowledge or
experience among digital asset users and investors.
The rule may not consider the potential for digital assets to support
microfinance or peer-to-peer lending in developing countries.
The rule may not adequately protect against cyberattacks or ransomware
attacks on digital asset exchanges and wallet providers.
There may be unintended consequences of the rule, including reduced
liquidity and higher transaction costs for investors.
The rule may lack transparency and public input, as it was developed
without adequate consultation with stakeholders.
The rule may not account for the unique characteristics of digital
assets that make them attractive to retail investors, such as their
low fees or instant settlement times.
The rule may not consider the impact of its implementation on local
economies and communities that rely on digital asset businesses.
The rule may create legal uncertainty, as it could conflict with other
federal or state regulations governing digital assets.
The rule may not be tailored to the specific needs of different
segments of the digital asset market, such as initial coin offerings
or decentralized finance.
The rule may not be effective at deterring bad actors or preventing
fraud, as it does not include strong enforcement mechanisms.
The rule may not be compatible with the goals of financial inclusion
and access to capital for underserved populations.
The rule may not be flexible enough to accommodate changes in
technology or market structure over time.
The rule may not address the risks posed by cryptocurrency lending or
borrowing activities.
The rule may not be cost-effective, as it could impose significant
compliance burdens without providing commensurate benefits.
The rule may not adequately address the unique risks associated with
digital assets, such as cybersecurity threats and volatility.
The rule may stifle innovation and competition in the digital asset
industry, as it could lead to increased regulatory burden and costs
for companies.
The rule may not be scalable or sustainable, as it may become
increasingly complex and expensive to administer as the industry
grows.
The rule may not address the root causes of fraud and abuse in the
digital asset market, focusing instead on symptoms rather than
underlying issues.
The rule may not recognize the differences between centralized and
decentralized forms of digital asset governance and ownership.
The rule may not take into account the potential for digital assets to
enhance financial inclusion and economic empowerment in developing
countries.
The rule may not consider the potential for digital assets to
democratize access to financial services for low-income or
underrepresented populations.
The rule may not be equitable or inclusive of all voices and
perspectives in the digital asset ecosystem.
The rule may not address the risks associated with leveraged trading
or margin loans in digital asset markets.
The rule may not address systemic risks posed by interconnectedness
between traditional financial systems and digital asset markets.
The rule may not account for the diverse range of use cases for
digital assets beyond speculation or investment purposes.
The rule may not reflect the latest developments in technology or
market trends, making it obsolete before it even takes effect.
The rule may not adequately balance the interests of different
stakeholder groups, such as investors, businesses, and policymakers.
The rule may not provide sufficient safeguards for whistleblowers or
other individuals who report violations of the law.
The rule may not consider the role of blockchain technology in
facilitating trustless transactions and reducing counterparty risk.
The rule may not account for the potential for digital assets to
reduce transaction costs and improve efficiency in the global economy.
The rule may not consider the cultural or historical significance of
digital assets, which have deep roots in various communities and
cultures.
The rule may not take into account the role of digital assets in
mitigating climate change or carbon emissions.
The rule may not take into account the different business models and
practices used by different types of digital asset businesses.
The rule may not adequately protect against hacking or theft of
digital assets, which can cause severe financial losses for investors.
The rule may not adequately protect against data breaches or other
cyber security incidents involving digital assets.
The rule may not provide enough flexibility for companies to adapt to
changing market conditions and technological advancements.
The rule may not be timely or responsive to emerging issues in the
digital asset market, as it may take years to develop and implement.
The rule may not account for the differing levels of sophistication
and understanding among digital asset users and investors.
The rule may not be consistent with existing laws or precedents
related to securities regulation.
The rule may not provide enough support for education or consumer
awareness campaigns around digital assets.
The rule may not provide enough support for minority-owned or
women-led digital asset businesses.
The rule may not adequately protect against conflicts of interest or
insider trading among regulators and industry participants.
The rule needs reproposed and the comment period was too short.