New submissions have been added to the US Securities and Exchange Commission Crypto Task Force “Written Input” page, increasing pressure on regulators as Congress debates crypto market structure rules.
The filings focus on self-custody protections and how proprietary trading in tokenised assets and decentralised finance markets should be treated under existing securities laws.
One submission was filed by an individual identified as DK Willard, with arguments framed around the interests of retail crypto users in Louisiana.
The second submission was made by the Blockchain Association Trading Firm Working Group, which represents firms active in tokenised and onchain markets.
The Louisiana-focused submission references state law HB 488, which affirms the right of residents to self-custody digital assets without reliance on intermediaries.
It argues that any forthcoming federal crypto market structure legislation should preserve strong registration, transparency, and anti-fraud and anti-manipulation safeguards.
The submission warns that broad exemptions proposed in some federal bills could allow developers and platforms to sidestep core investor protection obligations.
It adds that weakened oversight could raise risks of fraud, financial crime, and market abuse for retail users engaging with crypto protocols.
The Blockchain Association submission centres on how dealer registration rules apply to firms trading tokenised equities and DeFi assets for their own account.
It asks the SEC to clarify that firms engaging solely in proprietary trading, without customer solicitation, custody, or agency execution, should not automatically be classed as dealers.
The letter argues that forcing such firms into dealer registration could distort market participation and reduce liquidity in emerging onchain markets.
It also notes that current broker-dealer regulations were designed for traditional financial infrastructure and may not align with smart contract-based settlement systems.
The group suggests that regulatory interpretation should evolve to reflect differences between decentralised protocols and conventional market intermediaries.
These submissions arrive as negotiations continue over the federal crypto market structure bill known as CLARITY.
Lawmakers are attempting to reconcile competing priorities around investor protection, innovation, and the growth of decentralised financial markets.
Industry participants have signalled concern that overly restrictive rules could push development and liquidity offshore.
At the same time, policymakers have emphasised the need to prevent fraud and protect consumers as crypto adoption expands.
Senior White House crypto adviser Patrick Witt has urged the industry to accept compromises to ensure CLARITY can pass while Republicans retain control of Congress.
Witt has highlighted tensions within the bill around stablecoin yield, DeFi liquidity, and safeguards for retail investors.
Speaking from Davos, Coinbase chief executive Brian Armstrong acknowledged progress on the legislation and stressed the importance of cooperation.
We’re all working together to find a win-win scenario for everyone, especially the American people.
Brian Armstrong said.