- The SEC’s Division of Trading and Markets issued a staff statement on April 13 outlining conditions under which crypto user interfaces can avoid broker-dealer registration.
- Covered interfaces must function as neutral tools with no solicitation, no investment advice, and no custody of user assets, while disclosing fees, conflicts, and cybersecurity controls.
- The framework applies only to self-custodial wallet transactions in crypto asset securities and sunsets after five years unless the Commission takes further action.
The US Securities and Exchange Commission (SEC) has outlined conditions under which crypto trading interfaces can operate without registering as broker-dealers. This is officially a defined compliance path for certain parts of the decentralised finance (DeFi) sector.
In a statement, the SEC’s Division of Trading and Markets said it would not recommend enforcement action against “Covered User Interface Providers” that meet specific criteria.
These entities include platforms such as websites, mobile apps, and browser extensions that help users initiate transactions involving crypto asset securities through self-custodial wallets.
To qualify, interfaces must function strictly as neutral tools rather than intermediaries. They cannot recommend transactions, provide investment advice, custody user assets, execute trades, or route orders.
Fee structures must remain fixed and objective, applied uniformly across assets and counterparties, effectively prohibiting practices such as payment for order flow.
Where multiple execution options are presented, interfaces must rank them using measurable factors like price or transaction speed. Subjective labels, including terms such as “best” or “most reliable,” are not permitted.
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Key Measures In Place
Providers are also required to disclose key information, including their non-registered status, fee models, potential conflicts of interest, and cybersecurity safeguards. This includes measures addressing maximal extractable value, a practice where transaction ordering can be exploited for profit.
The framework also sets expectations around affiliated trading venues. Any such relationships must be disclosed, and affiliated platforms must be treated on equal terms with unaffiliated ones. Providers are expected to implement policies for assessing and monitoring connected trading systems and distributed ledger infrastructure.
The SEC emphasised that the statement reflects staff views and does not carry legal force. It is
set to expire five years from April 13, 2026, unless formal regulatory action is taken.
The guidance arrives alongside a broader regulatory proposal known as “Reg Crypto,” currently under review.
That initiative would introduce exemptions for early-stage projects, establish rules for token fundraising, and create a pathway for certain assets to transition out of securities classification, with coordination between the SEC and the Commodity Futures Trading Commission.
For DeFi interfaces and crypto aggregators, the statement provides initial clarity on operating within existing securities laws without assuming broker-dealer obligations.
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