Definition
The Digital Asset Market Structure Act is a legislative category encompassing multiple related bills introduced in the US Congress between 2023 and 2025 that propose a comprehensive framework for regulating digital asset trading venues, market participants, and market conduct. Unlike FIT21, which focuses primarily on classifying digital assets between SEC and CFTC jurisdiction based on decentralization, the various digital asset market structure bills focus on the infrastructure of digital asset markets — the exchanges, broker-dealers, custodians, and clearing systems through which digital assets are traded and settled. The legislative efforts reflect recognition by both the SEC and Congress that existing securities and commodity market structure rules were designed for centralized, institutional, business-hours-only markets and are ill-suited to blockchain-based markets that operate 24/7 globally with automated market-making and instant settlement.
The most prominent market structure proposals include the Digital Asset Market Structure Act introduced by the House Financial Services Committee (various versions 2023-2025) and companion Senate proposals. These bills generally propose: a unified registration category for digital asset trading platforms (combining elements of exchange, ATS, and broker-dealer registrations), customer asset segregation requirements (explicitly prohibiting the commingling of customer and firm assets that enabled FTX’s collapse), mandatory disclosure requirements for digital asset issuers analogous to Exchange Act reporting, anti-manipulation and anti-fraud provisions specifically calibrated to digital asset market dynamics, and coordinated SEC-CFTC oversight of platforms trading both digital securities and digital commodities.
Key Facts
- The House Financial Services Committee’s draft Digital Asset Market Structure Act (June 2023) would create a new “digital asset exchange” registration category with both the SEC and CFTC, allowing a single registration to cover trading of both digital securities and digital commodities.
- Customer asset segregation provisions in market structure proposals would prohibit digital asset exchanges from lending, pledging, or otherwise using customer assets without explicit customer consent — directly responding to the FTX bankruptcy, in which customer funds were used to make proprietary investments.
- Several versions of market structure legislation would establish a joint SEC-CFTC advisory committee to coordinate regulatory interpretations across the two agencies’ jurisdictions, addressing the current lack of formal inter-agency coordination on digital assets.
- Exchange registration requirements in market structure proposals include cybersecurity standards, financial condition reporting, trading halt procedures, and conflicts of interest disclosures — many borrowed from existing national exchange rules under the Exchange Act.
- Unlike FIT21, which has passed the House, the Digital Asset Market Structure Act had not advanced to a full chamber vote as of early 2026, with the two chambers developing parallel proposals that must be reconciled before any legislation reaches the President.
- The market structure bills have drawn strong support from regulated exchanges (Coinbase, Kraken) who see registration frameworks as providing competitive advantages over unregulated offshore competitors, and opposition from DeFi advocates who argue that decentralized protocols cannot comply with centralized exchange registration requirements.
- SEC Commissioner Hester Peirce, in her “Crypto Mom” capacity, has consistently advocated for a market structure framework as preferable to enforcement-by-enforcement regulation — making this legislation consistent with the priorities of the current SEC leadership.
Relevance to Tokenization
A comprehensive digital asset market structure law, if enacted, would resolve the most significant structural uncertainty facing US tokenized securities markets: whether a blockchain-based trading and settlement platform can operate legally under a clear federal license, or must piece together compliance from existing rules designed for very different market structures. Currently, tokenized securities ATSs must register as broker-dealers (with capital requirements designed for traditional BD activities), comply with ATS rules designed for equity dark pools, and separately address exchange registration questions if they seek to provide price discovery functions. A single “digital asset exchange” registration would streamline this compliance architecture significantly.
The customer segregation provisions of the market structure proposals are particularly important for institutional confidence in tokenized securities markets. Institutional investors — pension funds, insurance companies, endowments — require that their assets be segregated from the platform’s proprietary assets and protected in bankruptcy. While this requirement is well-established for registered broker-dealers under the SEC’s customer protection rule, it has not been clearly applied to blockchain-based tokenized securities platforms, and the FTX collapse demonstrated the catastrophic consequences of inadequate segregation. Market structure legislation that clearly extends and clarifies segregation requirements to digital asset platforms would remove a significant institutional concern.
For the tokenization industry as a whole, the market structure legislative process provides an important advocacy opportunity. Industry participants who engage constructively with the Congressional drafting process can shape the registration framework, disclosure requirements, and investor protection standards that will govern their markets for years. The FIT21 process demonstrated that the tokenization and digital asset industry can mobilize effective Congressional engagement, and the market structure legislation — which affects every platform that touches tokenized securities — is an equally high-stakes policy arena.
Related entries: FIT21, ATS Registration, Broker-Dealer Registration