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SEC Says Some Crypto Securities Trading Interfaces May Qualify for Broker Registration Exemption

Source

Minseung Kang

Summary

The U.S. SEC said some user interfaces used in crypto securities trading may not be subject to broker registration requirements if they meet certain conditions.
The SEC said the conditions include not recommending specific trades to investors, allowing users to set trade terms, and clearly disclosing fee structures and conflicts of interest.
The SEC said the position is an interim step to clarify regulatory treatment for crypto securities and will remain in effect for five years, though it could change depending on any formal commission position or rulemaking.

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The U.S. Securities and Exchange Commission said some interfaces used in crypto securities trading may not have to register as brokers if they meet certain conditions.

In a statement issued on June 13, the SEC’s Division of Trading and Markets outlined how it would apply regulations to providers of user interfaces for crypto securities transactions.

Websites, mobile apps and browser extensions that support blockchain-based trading may be exempt from broker registration if they satisfy specified requirements.

Those conditions include not recommending specific transactions to investors, allowing users to set the terms of a trade, and routing transactions based on objective criteria. Interface providers also must clearly disclose their fee structures and any conflicts of interest.

The SEC described the position as an interim step to clarify how regulations apply to crypto securities. The statement will remain effective for five years and may be revised as further regulatory discussions proceed.

The agency also made clear that the statement is not a legally binding rule and reflects only the views of SEC staff. Its scope could therefore change depending on any future formal commission position or rulemaking.