Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my input and express concerns regarding the proposed rule on Safeguarding Advisory Client Assets. While I appreciate the aim to enhance investor protections and address gaps in the custody rule, there are several areas of the proposal that require further consideration and clarification. One major concern relates to the lack of clarity on the definition of digital assets. The proposal does not provide clear guidance on what constitutes a digital asset, leading to confusion and potential misinterpretation. This lack of clarity poses significant challenges for investment advisers in complying with the rule, as they may struggle to determine the appropriate treatment of certain digital assets held on behalf of clients. Furthermore, I believe that the proposed regulations create reporting requirements for too many different participants in the decentralized finance (DeFi) space. This will likely result in multiple, inconsistent reports being generated for the same transaction, leading to redundancies and unnecessary complexities. Such an approach not only burdens market participants with excessive administrative tasks but also undermines the efficiency and innovation that DeFi can bring to the financial industry. Moreover, the proposed rule's lack of unambiguous definitions and clear boundaries makes it nearly impossible for investment advisers to fully comply with the law. To ensure effective implementation and foster regulatory compliance, it is crucial that the SEC provides clear and unambiguous definitions of key terms from the outset. In conclusion, while the proposed rule aims to enhance investor protections, it falls short in providing sufficient clarity on crucial aspects such as the definition of digital assets. I urge the SEC to address these concerns and provide more precise guidance to enable investment advisers to fully comply with the rule. It is crucial to establish clear boundaries that ensure investor protection while also fostering innovation in the digital asset space. Thank you for considering my comments. Sincerely Anonymous