Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to submit my public comment on the proposed rule "Safeguarding Advisory Client Assets." As a concerned individual, I have carefully reviewed the proposal and would like to raise some significant concerns about the lack of clarity regarding recordkeeping requirements for digital assets. Additionally, I would like to address the confusing reporting requirements for participants in decentralized finance (DeFi), which may lead to inconsistent and burdensome reporting practices. Firstly, I would like to express my concern regarding the ambiguity surrounding recordkeeping requirements for digital assets. In today's rapidly evolving financial landscape, digital assets play an increasingly significant role. Yet, the proposal fails to provide clear guidance on how investment advisers should handle and safeguard these assets. Without precise instructions and standards, market participants may face significant challenges in complying with the regulations, potentially exposing them to unnecessary risks. The Securities and Exchange Commission (SEC) should consider elaborating on the recordkeeping obligations specifically tailored to digital assets to ensure adequate protections are in place for investors. Furthermore, I would like to draw attention to the confusing reporting requirements outlined in the proposed rule, particularly regarding participants in DeFi. The decentralized nature of DeFi platforms inherently creates complexities in reporting transactions and activities. It is crucial that the SEC provides clear and comprehensive guidelines to avoid the generation of multiple and inconsistent reports for the same transaction. Such reporting inconsistencies increase the burden on market participants and create unnecessary compliance challenges. Clarity and uniformity in reporting requirements would mitigate confusion and promote efficient compliance practices in the emerging DeFi sector. Additionally, I would like to introduce my personal concern regarding the potential risks associated with the collection of extensive personal and financial data. While the proposed rule aims to enhance investor protection and SEC oversight, there is a growing apprehension about the vulnerability of personal information in an age of increasing cyber threats. As more data is collected and stored, the risks of fraud and identity theft significantly escalate. It is crucial for the SEC to strike a balance between obtaining necessary information for regulatory purposes and safeguarding individuals' privacy and security. Proper measures should be put in place to ensure the secure handling and storage of sensitive data to mitigate the risks of theft and fraud. In conclusion, I urge the SEC to address the lack of clarity on recordkeeping requirements for digital assets and provide clear guidelines specifically tailored to the rapidly growing digital asset market. It is vital to avoid burdensome reporting requirements that may lead to inconsistencies within DeFi platforms and create unnecessary compliance hurdles for market participants. Lastly, I emphasize the need to prioritize the protection of personal and financial data, taking appropriate measures to mitigate the risks of fraud and identity theft. By considering these concerns, the SEC can work towards creating a robust regulatory framework that fosters innovation while maintaining investor protection and privacy. Thank you for considering my public comment on this important matter. Sincerely, Naiche Dickenson