The U.S. Securities and Exchange Commission (SEC) issued guidance on Monday allowing certain decentralized finance (DeFi) user interfaces, including wallet apps and browser extensions, to operate without registering as broker-dealers when facilitating trades in crypto asset securities, provided they meet strict conditions.
The Division of Trading and Markets’ staff statement targets “Covered User Interfaces” — software like websites, mobile apps or wallet-embedded tools that help users prepare blockchain transactions using self-custodial wallets. These interfaces convert user inputs, such as buy/sell orders and prices, into executable code without handling custody, routing orders or offering investment advice.
To qualify for the relief, providers must adhere to a detailed checklist: no solicitation of specific trades, fixed neutral fees agnostic to products or venues, clear disclosures of conflicts and cybersecurity measures, and objective vetting of connected trading systems for liquidity and security. They can display market data and execution routes but must avoid endorsements like “best price” and enable user sorting by neutral criteria such as speed or cost.
The non-binding statement, effective as an interim measure for five years unless withdrawn, aims to clarify federal securities laws amid ongoing debates over crypto regulation. It does not address custody, advice or other potential triggers under Section 15(a) of the Securities Exchange Act.
Industry groups welcomed the move as a step toward innovation without prior SEC enforcement actions against similar tools. “This provides much-needed runway for self-custodial DeFi development,” said a spokesperson for the DeFi Education Fund, noting it aligns with recent SEC-CFTC coordination on digital assets.
Critics, including the Securities Industry and Financial Markets Association, have urged broader broker registration for wallet providers handling tokenized securities to protect investors. The guidance follows a series of 2026 clarifications, including a landmark SEC interpretation on crypto asset classifications.
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