The U.S. Securities and Exchange Commission said Monday that certain decentralized finance, or DeFi, user interfaces may operate without registering as broker-dealers when they facilitate trades in crypto asset securities. The relief applies only under strict conditions and covers tools such as wallet apps, browser extensions, and web-based interfaces.
The staff statement from the SEC’s Division of Trading and Markets focuses on what it calls “Covered User Interfaces.” These are software tools that help users prepare blockchain transactions through self-custodial wallets. In practical terms, they take user inputs such as order details and prices and convert them into executable code. The statement draws a firm line around what those interfaces cannot do: they may not hold customer assets, route orders, or provide investment advice.
Relief applies only to narrowly defined interface functions
To qualify, providers must satisfy a detailed list of conditions. They cannot solicit specific transactions or steer users toward particular trades. Fees must remain fixed and neutral, rather than changing based on the product involved or the venue used. The guidance also requires clear disclosure of conflicts of interest and of the cybersecurity measures in place.
The SEC said these interfaces may display market data and execution routes, but the presentation must stay neutral. Claims such as “best price” are off limits. If users are given sorting tools, the criteria must be objective, such as speed or cost. Connected trading systems also need to be vetted using neutral standards, with attention to liquidity and security rather than promotional preference.
Interim 5-year framework leaves other legal questions open
The statement is non-binding and operates as an interim measure for five years, unless it is withdrawn earlier. Its purpose is to provide clearer guidance on how federal securities laws may apply while debate over crypto regulation continues.
At the same time, the SEC made clear that this document does not resolve every issue. It does not address custody, investment advice, or other conduct that could still trigger broker status under Section 15(a) of the Securities Exchange Act. So a DeFi interface that fits within this relief may still face separate legal questions outside the scope of the statement.
Industry groups welcome the move, critics push broader registration
Crypto advocacy groups praised the guidance as a practical opening for self-custodial DeFi tools. A spokesperson for the DeFi Education Fund said the measure gives much-needed runway for self-custodial DeFi development and said it aligns with recent SEC-CFTC coordination on digital assets.
Opposition remains. The Securities Industry and Financial Markets Association has argued that wallet providers handling tokenized securities should face broader broker registration requirements in the name of investor protection. The guidance arrives after a series of SEC clarifications in 2026, including a major interpretation covering crypto asset classifications.