Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets." While I understand the importance of enhancing investor protections and addressing gaps in the custody rule, I believe that the rule may not adequately consider the unique properties and technological complexities of digital assets, particularly cryptocurrency. Cryptocurrency, built on blockchain technology, has the potential to revolutionize the financial industry. However, the decentralized nature of cryptocurrency poses challenges for regulatory oversight. My concern lies in the fact that the SEC's proposed rule does not take into account the nuances and complexities of this emerging asset class. As a result, the regulatory requirements may be impractical and may stifle innovation in the digital assets space. Furthermore, I am concerned about the lack of clarity in cryptocurrency regulation. The SEC's approach to regulating digital assets appears to be mired in uncertainty, leading to a fragmented landscape where different regulatory bodies have different interpretations. This lack of regulatory clarity not only hinders the growth of the digital assets industry but also creates an uneven playing field for market participants. Additionally, it is disconcerting to see the SEC's collaboration with selected partners behind closed doors. This raises questions about the transparency and fairness of the rulemaking process. It is essential that regulatory decisions are made in an open and inclusive manner, taking into account the diverse perspectives and expertise of stakeholders. In conclusion, I urge the SEC to thoroughly consider the unique properties and technological complexities of digital assets, such as cryptocurrency, when formulating regulations. This will ensure that the regulatory framework strikes the right balance between investor protection and fostering innovation. Furthermore, I encourage the SEC to enhance transparency and public participation in the rulemaking process to promote fairness and regulatory clarity. Thank you for considering my concerns. Sincerely, Markus