Client Alert: SEC Staff Provides Guidance on Broker-Dealer Registration for Crypto Asset User Interface Providers

April 15, 2026

On April 13, 2026, the Staff of the SEC’s Division of Trading and Markets issued a statement addressing broker-dealer registration requirements for certain providers of crypto asset user interfaces. While not an official rule, regulation, or law, the statement provides important clarity regarding how SEC staff currently views broker-dealer registration and compliance issues for these important DeFi service providers.

This alert summarizes key aspects of the Staff’s guidance, focusing on who qualifies as “Covered User Interface Providers” and what compliance measures Covered User Interface Providers should consider undertaking.

Background

The Securities Exchange Act of 1934 generally requires any person engaged in the business of effecting transactions in securities for the account of others to register as a broker. Broker registration comes with burdensome reporting and compliance requirements.

In recent years, a variety of DeFi market participants have developed interfaces that facilitate, route, or otherwise play a role in securities transaction processes. Increasing automation and decentralized technology blurred the lines around traditional broker-dealer activity, leading to regulatory uncertainty. The staff statement provides much-needed clarity on how these user interfaces intersect with broker-dealer registration obligations.

The Guidance

When a Covered User Interface Provider takes the measures discussed in the statement, the SEC staff says it will not object to that Covered User Interface Provider operating without registration as a broker-dealer under Section 15(b) of the Exchange Act.

Who Qualifies as a “Covered User Interface”?

The Staff defines a “Covered User Interface” as an interface provided by a website, browser extension, or other software application (such as a mobile app) that may be embedded in a self-custodial wallet or separately available for download. It is designed to assist users engaging in user-initiated crypto asset securities transactions on blockchain protocols or blockchain-based smart contracts utilizing the user’s self-custodial wallet. Providers generally charge users a fixed percentage fee per transaction.

  • Notably, the guidance specifically excludes providers who, among other things:
  • create, operate, or offer custodial wallets held on behalf of an investor;
  • solicit investors to engage in particular crypto asset securities transactions;
  • provide commentary on a potential execution route, e.g., characterizing a pathway as the “best” or “most reliable;”
  • make investment recommendations or provide advice;
  • conduct independent asset valuations;
  • hold or manage users’ funds, securities, or stablecoins;
  • execute or settle transactions;

Compliance Measures

Increased certainty with respect to registration requirements comes with increased compliance burdens. To benefit from the Staff’s position and maintain compliance, the Staff provided compliance guidance regarding (1) operational requirements and limitations, (2) policies and procedures, (3) books and records and (4) disclosures.

Operational Requirements and Limitations

Covered User Interface Providers should adhere to certain operational constraints, including:

  • User Control and Education. The interface must permit users to customize any default crypto asset security transaction parameters and must provide educational material to help users formulate and set their desired transaction parameters.
  • Execution Route Transparency. If the interface displays only one potential execution route, the user must be given the ability to see additional routes, if applicable. If multiple potential execution routes are displayed, the interface must provide filtering or sorting tools that display potential routing destinations based on objective factors (such as alphabetical order, lowest/highest price, or speed) and allow the user to sort based on such factors.
  • Compensation Limitations. The provider must limit its compensation to a fixed charge to the user, which may be charged per crypto asset securities transaction (as a flat fee or percentage of the transaction) or as a flat fee. Such charges must be based on objective factors, applied consistently, and must be product, execution route, execution venue, and counterparty agnostic. Importantly, this precludes receipt of payments for order flow by the provider.

Policies and Procedures

Covered User Interface Providers should establish reasonably designed policies, procedures, and controls, including related to:

  • Evaluation of Trading Venues. The provider should evaluate, onboard, and audit the trading venues and distributed ledger trading systems that the interface will connect to or interact with.
  • Default Parameter Assessment. The provider should evaluate, determine, and periodically reassess any default crypto asset security transaction parameters based on objective factors.
  • Conflicts of Interest. The provider should address any conflicts of interest or risks associated with any default parameters.

Books and Records

The Staff also suggests that maintaining books and records—such as by utilizing publicly available distributed ledger technology transaction records in coordination with the maintenance of internal, non-public books and records—may be helpful in demonstrating compliance with the statement’s conditions.

Disclosure Requirements

Covered User Interface Providers should prominently disclose to users, and promptly update as necessary, all material facts related to nine categories, including, but not limited to:

  • Provider’s Role relating to the creation, offering and/or operation of the interface
  • The fact that the provider is not registered with or regulated by the SEC
  • Fees
  • Conflicts of interest
  • Cybersecurity
  • Policies, procedures, and controls to protect users’ information

Key Takeaways

Entities that may be Covered User Interface Providers should carefully evaluate their operations against the conditions outlined in the statement and consider engaging counsel to assess compliance. The Staff has invited public comment on all aspects of the statement, and industry participants may wish to submit feedback to shape future regulatory developments in this space.

If you have questions about how this guidance may affect your business or compliance obligations, please contact Michael Frisch (mfrisch@crokefairchild.com), Ariella Guardi (aguardi@crokefairchild.com), David Lopez-Kurtz (dlopezkurtz@crokefairchild.com), or Bakhtawar Mirjat (bmirjat@crokefairchild.com).