TL;DR
- The SEC added two submissions to the Crypto Task Force addressing self-custody and trading rules for tokenized and DeFi markets.
- A submission from Louisiana cited HB 488 and called for federal rules that preserve registration, transparency, and antifraud standards without broad exemptions.
- The Blockchain Association requested excluding firms that trade on their own account in DeFi and tokenized equities from being classified as dealers when there is no custody or intermediation.
The US Securities and Exchange Commission (SEC) added two new submissions to the Crypto Task Force’s “Written Input” section, focused on digital asset self-custody and the regulation of trading in tokenized and DeFi markets. The documents were published on Tuesday and are part of the consultation process surrounding future federal legislation on crypto market structure.
One of the submissions was filed by DK Willard and focuses on retail users in the state of Louisiana. The text cites state law HB 488, which explicitly recognizes residents’ right to self-custody digital assets. The document argues that any federal framework should preserve strict registration requirements, transparency standards, and rules against fraud and market manipulation in crypto markets. It also warns that certain exemptions included in legislative drafts could allow developers and platforms to bypass these basic investor protection obligations.
The second submission comes from the Blockchain Association Trading Firm Working Group and centers on the application of “dealer” rules to firms operating in tokenized equity markets and DeFi assets. The group asks the SEC to clarify that companies trading exclusively for their own account should not be automatically classified as dealers subject to registration under the Exchange Act. The request is limited to firms that do not solicit customers, do not custody third-party assets, and do not execute trades as intermediaries.
The SEC Comes Under Pressure From an Industry Demanding Clarity
The Blockchain Association’s document also notes that the current broker-dealer regulatory framework was designed for traditional markets and does not directly address models based on smart contracts and on-chain settlement. In that context, it calls for adjustments to regulatory criteria to avoid the automatic application of rules designed for centralized infrastructures.
The submissions were published as negotiations continue in Congress over the CLARITY bill, which seeks to define the crypto market structure in the United States. The legislative debate includes issues related to stablecoin regulation, liquidity provision in DeFi protocols, and investor protection mechanisms.
From the executive branch, White House crypto adviser Patrick Witt urged the industry to accept compromises to facilitate the passage of the bill while Republicans retain control of Congress. In parallel, Coinbase CEO Brian Armstrong said from Davos that the CLARITY bill shows progress and that current discussions involve lawmakers, regulators, and companies across the sector.
The new submissions underscore the pressure on the SEC and Congress to define regulatory criteria for the crypto industry in the United States
