U.S. Securities and Exchange Commission staff outlines when onchain crypto asset securities interfaces need not register as broker-dealers

The U.S. Securities and Exchange Commission’s Division of Trading and Markets published a staff statement setting out circumstances in which staff will not object to an interface provider creating, offering, or operating a user interface used by investors for onchain crypto asset securities transactions without registering as a broker-dealer under Section 15(b) of the Securities Exchange Act. In a related statement, Commissioner Hester M. Peirce welcomed the guidance but argued for a more permanent regulatory approach to the broker definition. The statement underscores that wallets and interfaces do not become “brokers” solely because they enable users to create or control self-custody wallets or transmit instructions to a blockchain, allow users to view onchain prices or data, or format messages for users to sign or approve from a self-custody wallet. Peirce also referenced SEC v. Coinbase Inc., which rejected arguments that a wallet service charging a 1% transaction fee was a securities “broker,” and urged reassessing how the broker concept applies in light of new technologies. Peirce invited public feedback to inform future SEC rulemaking on how terms such as “broker” should be assessed against current market and technology developments.