Prefer us on Google 
Download App 
Download App
The U.S. Securities and Exchange Commission has released new staff guidance suggesting that certain user-facing platforms engaged in crypto securities trading might not need to register as broker-dealers, provided they adhere to a stringent set of criteria aimed at limiting discretion, influence, and potential conflicts of interest.
In a communication issued by the U.S. Securities and Exchange Commission’s Division of Trading and Markets, the regulatory body outlined a framework under which websites, mobile applications, and browser-based utilities facilitating blockchain-based transactions could operate without traditional broker registration for a defined period.
This guidance specifically pertains to “covered user interfaces,” which encompass software designed to assist users in preparing and submitting crypto asset securities transactions via self-custodial wallets. According to SEC staff, these tools may qualify for an exemption if they function as impartial conduits rather than as intermediaries exercising judgment or exerting influence over trading activities.
To operate without broker-dealer registration, providers of these interfaces must comply with several conditions. These include abstaining from recommending specific trades, avoiding the solicitation of particular transactions, and ensuring users maintain complete authority over trade parameters such as price, volume, and execution preferences. The interfaces must also utilize objective, pre-disclosed standards when routing trades or presenting execution alternatives.
Previously, in March, the SEC and CFTC jointly issued guidance indicating that the majority of digital assets do not qualify as securities. They also introduced a formal token taxonomy that categorizes stablecoins, digital commodities, digital tools, and collectibles as being outside the scope of securities law.
This framework designated only “digital securities” as being subject to traditional regulation, while also clarifying that activities such as staking, mining, and airdrops generally do not fall under the Howey Test. This represents a shift from previous enforcement-focused strategies towards a more clearly defined regulatory structure.
SEC’s Disclosure Structures
The SEC also highlighted the importance of disclosure obligations. Providers are required to clearly communicate their fee structures, potential conflicts of interest, and any affiliations with trading venues or liquidity systems. When a provider offers users access to multiple execution routes, the system must enable users to sort or filter these options based on objective metrics like cost or speed, rather than editorial or promotional rankings.
Another critical condition is operational impartiality. The guidance prohibits interface operators from describing trading routes as “optimal” or “preferred,” or from offering commentary that could be construed as investment counsel. Furthermore, the systems must refrain from making discretionary decisions regarding the presentation of market data or the routing of transactions.
The staff communication also imposes restrictions on compensation models. Fees must be fixed, transparent, and uncorrelated with trade results, execution venues, or counterparty choices. The objective is to diminish any incentives for interface providers to favor specific trading environments.
Additionally, providers are expected to establish protocols for assessing and overseeing connected trading venues. These protocols must evaluate elements such as liquidity, clarity, security, and dependability, and must be applied uniformly across all integrated systems. Any default trading parameters must also be grounded in objective criteria and subject to continuous evaluation.
The SEC specified that this communication does not constitute a formal rule or binding regulation. Rather, it represents the staff’s current interpretation of how existing broker-dealer regulations under the Securities Exchange Act of 1934 might apply to crypto-centric interfaces. This guidance will remain effective for a period of five years, unless superseded or amended through future commission-level rulemaking.
Crucially, the agency emphasized that the exemption is narrowly defined. It does not extend to entities that negotiate trades, offer investment advice, hold user assets, execute transactions, or engage in other traditional broker functions. Any platform undertaking such activities would still be subject to existing registration mandates.
Based on materials from : bitcoinmagazine.com