The U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force recently updated its ‘Written Input’ section with two new submissions that address the rights to self-custody and regulatory frameworks for trading in tokenized and decentralized finance (DeFi) markets.

One submission, presented by ‘DK Willard,’ focuses on retail users in Louisiana, while the second originates from the Blockchain Association Trading Firm Working Group regarding dealer regulations for tokenized equity markets.

Key Points from the Submissions on Custody and DeFi

The submission from Louisiana references state law HB 488, which secures the self-custody rights of residents over their digital assets, and emphasizes that forthcoming federal crypto legislation must uphold strong requirements for registration, transparency, and consumer protection against fraud.

It also highlights concerns that certain federal proposals might exempt developers from core investor protections, potentially facilitating fraud and financial misconduct.

Meanwhile, the Blockchain Association’s communication urges the SEC to ensure that firms trading tokenized stocks and DeFi assets solely for their benefit, without seeking out clients, should not be categorized as ‘dealers’ under the Exchange Act, which would otherwise impose unnecessary regulatory burdens.

Related: DeFi Leaders Voice Concerns Amid Market Structure Bill’s Uncertain Future

Blockchain Association Letter
The Blockchain Association Letter. Source: SEC

The letter notes that existing broker-dealer regulations were crafted for traditional markets and may require revision to suit smart-contract settlement mechanisms.

Legislative Compromises and Industry Reaction

These submissions come amid continued discussions in Congress surrounding the federal crypto market structure bill, referred to as CLARITY.

Patrick Witt, the Senior Crypto Adviser at the White House, has called on the industry to accept compromises to ensure the bill’s passage while Republicans maintain a majority in Congress and the Trump administration is in office. He underscored the ongoing effort to balance concerns regarding stablecoin yields, DeFi liquidity, and investor protection within the legislative framework.

During a talk from Davos, CEO of Coinbase, Brian Armstrong, noted the advancement made in pushing CLARITY forward and remarked:

“We’re all working together to find a win-win scenario for everyone, especially the American people.”

Find out more in our feature on how crypto laws have evolved and what changes might come in 2026.