Oct. 31, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule titled "Safeguarding Advisory Client Assets." While I understand the objective of enhancing investor protections and addressing gaps in the custody rule, I have concerns regarding the lack of clarity on the definition of digital assets. In today's rapidly evolving financial landscape, digital assets, such as cryptocurrencies built on blockchain technology, are transforming the way we perceive and engage with finance. However, the proposal fails to provide clear guidance on what constitutes a digital asset, leading to potential confusion and misinterpretation among investment advisers. An issue of particular concern is the current disagreement between the SEC and judges regarding the classification of certain digital assets. For example, in the recent case involving XRP, a judge ruled that it does not qualify as a security. This raises questions about how digital assets like ADA, HEX, PulseChain, and PulseX will be treated and their eligibility for custody under the proposed rule. While investor protection is of utmost importance, it is crucial to avoid stifling innovation and hindering the development of new technologies in the financial industry. Clear and well-defined guidelines for digital assets would provide the necessary certainty for investment advisers to operate within the bounds of the law and protect client assets effectively. I urge the SEC to consider incorporating comprehensive definitions and guidelines for digital assets into the final rule. This would provide much-needed clarity and ensure that investment advisers are able to navigate the evolving landscape with confidence, while still maintaining appropriate safeguards for client assets. Thank you for considering my concerns. I appreciate the opportunity to provide my input on this important matter. Joh Jackson