Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule titled "Safeguarding Advisory Client Assets." While I acknowledge the aim of enhancing investor protections and addressing gaps in the custody rule, I believe there are several key areas where the proposed rule falls short and may even pose risks to investors and their assets. One of my primary concerns is the insufficient cybersecurity requirements for custodians, particularly in the context of digital assets. In an era where cybercrimes and hacks are becoming increasingly prevalent, it is crucial that the SEC enforces rigorous cybersecurity standards on custodians to protect investors' assets from theft and fraud. The proposed rule does not adequately address these risks, leaving investors vulnerable to potential security breaches and financial losses. I urge the SEC to reconsider and impose stringent cybersecurity requirements on custodians, especially when it comes to the custody of digital assets. Furthermore, I am deeply concerned about the privacy implications associated with the proposed rule. This rule calls for an extensive sharing of sensitive financial data and personal information with third parties, which raises significant privacy and safety concerns. By allowing numerous entities access to individuals' financial data and social security numbers, there is an increased risk of fraud and identity theft. It is essential for the SEC to prioritize privacy protections and ensure that appropriate safeguards are in place to prevent unauthorized access and misuse of personal information. I urge the SEC to reassess the potential privacy risks posed by the proposed rule and take steps to mitigate these risks effectively. Additionally, I have reservations about the potential increase in fraud and identity theft resulting from the collection and storage of sensitive personal and financial information related to digital asset transactions. The proposed rule places greater reliance on the use of technology and digital platforms, which may inadvertently expose investors to higher risks. Given the growing number of sophisticated cybercriminals targeting digital assets, it is crucial for the SEC to proactively address these concerns and implement robust security measures to safeguard investors from fraudulent activities and identity theft. I respectfully request that the SEC thoroughly evaluate the potential risks associated with this aspect of the proposed rule and implement measures to mitigate such risks effectively. In conclusion, while I appreciate the SEC's efforts to enhance investor protections through the proposed rule, I strongly urge you to reconsider and address the concerns raised regarding insufficient cybersecurity requirements for custodians. Moreover, please ensure that robust privacy protections are in place to safeguard individuals' sensitive financial data and personal information. Lastly, recognize the potential increase in fraud and identity theft resulting from the proposed rule's reliance on digital asset transactions and take appropriate measures to mitigate these risks effectively. Thank you for considering my comments on this matter. I trust that my concerns will be taken into account to ensure the proposed rule promotes the utmost protection of investors and their assets.