The US SEC's Division of Trading and Markets has detailed conditions under which crypto asset trading interfaces can operate without registering as brokers. Entities that facilitate securities transactions typically must register with the SEC. However, SEC staff issued a statement indicating they would not recommend enforcement action against certain providers operating without registration, subject to specified requirements.
Under this guidance, "Covered User Interface Providers" can avoid broker-dealer registration if they function as neutral tools. Providers must not push specific trades or offer investment advice. If multiple execution methods are shown, sorting must be objective, avoiding subjective claims. Fees must be straightforward and consistent, unaffected by asset or route selection. Affiliations with trading venues require clear disclosure and fair treatment.
The framework also mandates extensive disclosures regarding non-registered status, fees, conflicts of interest, system mechanics, cybersecurity, and interface limitations. Activities like executing trades, handling assets, providing advice, or negotiating transactions would trigger broker status.
This statement signals the staff's enforcement posture and offers interim guidance pending broader regulatory action. It is set to expire in five years unless superseded. The SEC is also advancing a proposed "Reg Crypto" framework for token fundraising and DeFi rules.