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

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 understand
the need to enhance investor protections and address gaps in the
custody rule, I believe that certain aspects of this proposed rule may
have a negative impact on investor access to digital assets.

One of my main concerns is the scope of the rule, particularly the
inclusion of poorly defined terms. The proposed regulations use terms
such as "platform," "software," and
"ledger" without providing clear definitions. These terms
are susceptible to various interpretations, which may lead to
confusion and inconsistency in the application of the rule.
Additionally, the definition of other terms, like "wallet"
and "validator," do not align with their technical meaning.
This lack of clarity may hinder investors' ability to understand
their legal obligations and make informed decisions.

Furthermore, the proposed rule's treatment of digital assets may
restrict investor access to this emerging asset class. By imposing
additional custody requirements and limitations without sufficient
justification, the rule may create unnecessary barriers to entry for
investors. This could stifle innovation and limit the potential growth
and development of the digital asset market.

As we consider the potential negative impact on investor access to
digital assets, it is important to strike a balance between regulatory
oversight and enabling investors to participate in this evolving
industry. Clarity in terms and a nuanced approach to the regulation of
digital assets will be essential to ensure that the rule does not
inadvertently impede investor access or hinder the growth of this
asset class.

In conclusion, I urge the Securities and Exchange Commission to
carefully consider the potential negative impact on investor access to
digital assets and take necessary steps to address the concerns raised
regarding the use of poorly defined terms and restrictive regulations.
By adopting a balanced and informed approach, we can safeguard
investor interests without stifling innovation and opportunity.

Thank you for considering my comments. If there are any additional
areas of concern or questions regarding the proposed rule, I would be
more than willing to offer my input.

Sincerely,

David