USDSEC staff offers conditional broker relief for some crypto interfaces
Statement outlines limits for self-custodial transaction tools
TL;DR
- SEC staff said on April 13, 2026 it would not object to some crypto interfaces avoiding broker registration under strict conditions.
- The relief applies to self-custodial interfaces that prepare transactions but do not solicit, advise, custody, or route orders.
- Hester M. Peirce said recent SEC interpretations have “contorted the term ‘broker’ beyond recognition.”
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The SEC’s Division of Trading and Markets said on April 13, 2026 it would not object to certain crypto user interface providers operating without broker-dealer registration under Section 15(b) of the Exchange Act, provided they meet specific conditions tied to self-custodial crypto asset securities transactions.
The position applies to “Covered User Interface” providers offering tools through websites, browser extensions, wallet-linked software and mobile apps. These interfaces allow users to prepare blockchain transactions using self-custodial wallets by converting user-defined inputs, including direction, volume, asset, price or price range, into executable instructions for signing and submission.
The staff position is not a formal rule, is not Commission-approved guidance and carries no independent legal force. It is structured as an interim approach that will be withdrawn five years after April 13, 2026 if no further Commission action is taken.
Requirements enforce neutrality, transparency and user control
The framework requires interfaces to remain neutral tools. Providers must allow users to customize transaction parameters and may offer educational material, but cannot solicit users to enter specific crypto asset securities transactions or influence decisions through subjective language such as describing routes as the “best price” or “most reliable.”
Interfaces must present execution options using objective and independently verifiable criteria. Users must be able to sort or filter routes based on factors such as alphabetical order, lowest or highest price, or speed. Additional routes must remain accessible even when a single option is initially displayed.
Fees must be fixed, objective and consistently applied. Charges may be structured as flat fees or percentages paid by users but cannot favor any product, venue, route or counterparty. The structure excludes compensation models such as payment for order flow from third parties.
Disclosure obligations extend across operational, financial and technical elements. Providers must clearly state their role, disclose that they are not registered with or regulated by the SEC for operating the interface, and provide detailed information on fee structures, conflicts of interest, system parameters, cybersecurity practices, data protections, venue integrations and risks tied to default transaction settings.
Interfaces connected to affiliated trading venues must disclose those relationships. Affiliated venues must be accessible under the same terms and conditions as unaffiliated alternatives.
Activities outside the scope of the relief
The staff position does not apply to providers that move beyond neutral interface functions. Disallowed activities include negotiating transaction terms, soliciting specific securities transactions, providing investment advice or recommendations, arranging financing, processing trade documentation, performing independent valuations, holding or accessing user funds, securities or stablecoins, executing or settling transactions, or taking or routing orders.
The framework centers on operational neutrality, requiring interfaces to function strictly as technological intermediaries while leaving control of private keys and transaction execution entirely with users.
SEC Commissioner Hester M. Peirce supported the statement and called for a more durable regulatory approach. Peirce wrote, “Crypto is forcing the Commission to confront its inner demons that have driven it toward ever more expansive readings of the securities laws,” and added that recent history has “contorted the term ‘broker’ beyond recognition.”
Peirce also said the law already makes clear that wallets and interfaces do not become brokers solely by enabling users to create or control self-custody wallets, view onchain data or format messages for user authorization.
The SEC currently has three Republican commissioners out of five seats filled, while the CFTC is left with only Chair Michael Selig after Caroline Pham’s departure in December. Lawmakers are considering requiring minimum staffing levels at both agencies before a Senate market structure bill can take effect.
FAQ
What did SEC staff announce?
A conditional non-objection path for some crypto interfaces to avoid broker-dealer registration.
Which interfaces are covered?
Certain self-custodial websites, browser extensions, wallet-linked software and mobile apps.
What activities are not covered?
Advice, solicitation, custody, financing, valuations, execution, settlement, and order-taking or routing.
What did Hester Peirce say?
She said SEC interpretations had “contorted the term ‘broker’ beyond recognition.”
This article has been refined and enhanced by ChatGPT.
