The submissions add to mounting pressure on regulators as Coinbase CEO Brian Armstrong calls for compromise to pass market structure legislation.
The US Securities and Exchange Commission’s (SEC) Crypto Task Force “Written Input” page added two new submissions on Tuesday that focus on self‑custody rights and how proprietary trading in tokenized and decentralized finance (DeFi) markets should be regulated.
One submission comes from “DK Willard,” centered on Louisiana retail users, and the other from the Blockchain Association Trading Firm Working Group on dealer rules for tokenized equity markets.
Submissions target self-custody protections, DeFi
The Louisiana submission cites state law HB 488, which affirms residents’ right to self-custody digital assets, and argues that upcoming federal crypto market structure legislation should preserve strong registration, transparency and anti‑fraud and anti‑manipulation requirements.
It warns that exemptions in some federal proposals could allow developers and platforms to avoid core investor protection obligations, increasing the risk of fraud and financial crime for consumers.
The Blockchain Association letter asks the SEC to clarify that companies trading tokenized equities and DeFi assets only for their own account, without customer solicitation, custody or agency execution, should not automatically be treated as “dealers” required to register under the Exchange Act.
Related: DeFi leaders voice concerns amid market structure bill‘s uncertain future
It also notes that existing broker‑dealer rules were designed for traditional markets and may need adaptation for smart-contract settlement.
CLARITY compromises and industry response
The submissions arrive as negotiations over the federal crypto market structure bill, CLARITY, continue in Congress.
Senior White House crypto adviser Patrick Witt urged the industry to accept compromises to get the act passed while Republicans still control Congress, and the Trump administration remains in power, highlighting how lawmakers and industry are trying to balance the issues regarding stablecoin yield, DeFi liquidity and investor protection concerns within the legislative text.
Speaking from Davos on Wednesday, Coinbase CEO Brian Armstrong acknowledged the progress made so far on advancing CLARITY and said:
“We’re all working together to find a win-win scenario for everyone, especially the American people.”
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