SEC Outlines Conditions for Unregistered Crypto Interfaces

The U.S. Securities and Exchange Commission issued a staff statement on April 13 outlining conditions under which certain cryptocurrency user interfaces can operate without registering as broker-dealers, providing developers with clearer boundaries for self-custodial wallet tools.

The statement, released by the SEC's Division of Trading and Markets, focuses on what the agency describes as covered user interfaces. These include websites, browser extensions, mobile applications, or embedded wallet software that enable users to initiate and execute transactions involving crypto asset securities on blockchain protocols or smart contracts. Users maintain control through self-custodial wallets, where they hold their own private keys and make independent decisions without intermediaries handling funds.

SEC staff indicated they would not recommend enforcement action against providers operating such interfaces without broker-dealer registration, provided specific requirements are met. Providers must refrain from soliciting investors or specific transactions, offering investment advice, or influencing user choices through language like "best price" or preferential routing. Interfaces...