SEC Crypto Task Force Pressed on Self-Custody Rights and DeFi ‘Dealer’ Rules in New Filings

The US Securities and Exchange Commission’s Crypto Task Force is going through renewed strain from business teams and particular person contributors as questions round self-custody rights and the scope of seller regulation in decentralized finance transfer again into focus.

On Tuesday, the Task Force’s public “Written Input” web page added two new submissions that replicate a broader stress shaping US crypto coverage: how one can shield buyers with out collapsing core options of on-chain markets, significantly self-custody and non-custodial buying and selling.

SEC Filings Spotlight Self-Custody Protections and DeFi Market Structure

One submission, filed by a person recognized as DK Willard, facilities on the expertise of retail crypto customers in Louisiana and ties state-level protections on to the federal debate now unfolding in Washington.

Willard factors to Louisiana laws corresponding to House Bill 488, which explicitly affirms residents’ proper to self-custody digital property, arguing that these protections shouldn’t be diluted by federal market construction proposals.

The submitting exhibits that Congress is contemplating frameworks that embody registration, transparency, and anti-fraud requirements, however sure exemptions threat permitting builders or platforms to sidestep core investor protections.

In Willard’s view, weakening self-custody protections may expose shoppers to fraud and monetary crime fairly than supporting accountable innovation.

At the identical time, a extra technical submission from the Blockchain Association’s Trading Firm Working Group focuses on how proprietary buying and selling companies ought to be handled when offering liquidity in tokenized fairness markets that function on DeFi infrastructure.

The group argues that long-standing distinctions in securities regulation between sellers and merchants ought to proceed to use on-chain.

Trading for one’s personal account, with out buyer solicitation, custody, or company execution, mustn’t set off seller registration beneath the Exchange Act, the submitting says, even when that buying and selling happens by smart contracts and decentralized venues.

The affiliation frames this subject as central as to if tokenized fairness markets can perform in any respect throughout any SEC-approved innovation exemption or sandbox.

Without authorized certainty, proprietary buying and selling companies could keep away from on-chain markets altogether, leaving tokenized equities with out dependable liquidity, value discovery, or arbitrage.

The group stresses that current broker-dealer guidelines, together with these governing clearing, custody, reporting, and capital, have been designed for intermediated markets and will take time to adapt to atomic settlement and sensible contract execution.

Allowing proprietary companies to take part instantly, they argue, would give regulators area to modernize these frameworks with out freezing market exercise in the interim.

SEC’s New Crypto Approach Takes Shape After 2025 Restructuring

These submissions land inside a broader shift on the SEC that started after the company’s restructuring in early 2025.

Under Commissioner Hester Peirce, the Crypto Task Force has moved away from what business individuals lengthy criticized as regulation by enforcement and towards formal rulemaking and steering.

Over the previous yr, that method has included dismissing the SEC’s lawsuit against Coinbase, pausing enforcement actions against Binance, and closing investigations into different main platforms.

The company has additionally rescinded restrictive custody steering and clarified that sure crypto actions don’t represent securities transactions.

The newest filings additionally intersect with an more and more complicated legislative backdrop.

Negotiations over the CLARITY Act, which goals to ascertain a complete federal market construction for digital property, stay unsettled.

A scheduled markup in the Senate Banking Committee was postponed following business opposition, whereas the Senate Agriculture Committee remains to be anticipated to overview the invoice later this month.

Other current submissions to the Crypto Task Force spotlight how contested the custody query stays.

Industry teams, together with SIFMA, have cautioned towards granting broad exemptions to pockets suppliers that carry out broker-dealer capabilities, whereas coverage teams tied to the Solana ecosystem are calling for clearer distinctions between non-custodial software program and regulated intermediaries.

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