U.S. SEC Clears Path for Decentralized Crypto Asset Security Trading With Broker Registration Exception for User Interfaces

On April 13, 2026, the staff of the Division of Trading and Markets (Staff) of the U.S. Securities and Exchange Commission (SEC or the Commission) issued a statement (Statement) that it would not object to certain technology providers — referred to as “Covered User Interface Providers” — creating, offering, and/or operating software interfaces that allow users to prepare and submit transactions in crypto asset securities without registering as broker-dealers.

The Statement is subject to a number of conditions and is part of an effort by the SEC to provide greater clarity regarding the application of the federal securities laws to activities involving crypto asset securities.

Key Takeaways

The Statement builds on prior Staff positions regarding technology providers — and reflects positions Sidley submitted to the SEC Crypto Task Force on behalf of clients — by reinforcing that Covered User Interface Providers primarily provide technological infrastructure: software that enables users to formulate and transmit securities transactions using blockchain technology (including decentralized finance (DeFi) trading tools, protocols, or smart contracts) rather than acting as securities brokers.¹ In doing so, it situates these activities within the framework of prior no-action relief for technology providers while adapting that reasoning to the context of crypto asset securities and decentralized systems.

A central feature of the Statement is the absence of discretion by Covered User Interface Providers. Covered User Interface Providers must rely on pre-disclosed, objective parameters and may not exercise control over transaction outcomes, market information, or routing decisions.

Significantly, the Statement delineates the boundary between permissible infrastructure activity and conduct that would trigger broker registration. It identifies a range of prohibited activities — such as making recommendations, soliciting transactions, handling orders or assets, or receiving payment for order flow — while permitting others, including the provision of market data and, notably, the receipt of either a flat fee or transaction-based compensation from users. This latter point reflects a departure from prior Staff positions and may expand viable business models. The Statement also has potential implications beyond supporting the continued development of non-custodial DeFi interfaces, including their interaction with more traditional trading systems. However, the Statement explains that the views expressed therein do not apply to securities other than crypto asset securities and do not address other potential registration requirements or liabilities under the federal securities laws.

The Statement follows a recent Commodity Futures Trading Commission (CFTC) no-action letter addressing similar interface and wallet functionality for CFTC-regulated derivatives trading.² However, the two frameworks impose materially different conditions and reflect distinct regulatory approaches, creating potential compliance complexity for providers operating across both regimes.

Key Terms

For purposes of the Statement:

• “Covered User Interface” means an interface provided by a website, browser extension, or other software application (including a mobile application), whether embedded in a self-custodial wallet or available separately for download, that converts user-identified transaction parameters (e.g., asset, order direction, volume, and price or price range) into blockchain-executable instructions for signature and transmission via a user’s self-custodial wallet. Covered User Interfaces may also display market data (such as potential execution routes, asset prices, and estimated transaction or “gas” costs), provide educational material, and charge transaction fees.
• “Covered User Interface Provider” means a person that creates, offers, and/or operates a Covered User Interface to prepare transactions in crypto asset securities. A Covered User Interface Provider may also provide a self-custodial wallet to users or facilitate transactions involving an unaffiliated self-custodial wallet.
• “Wallet” means software or hardware used to store a crypto asset security investor’s private key, which is used to engage in crypto asset securities transactions.
• “Self-custodial wallet” means a wallet in which neither the provider of the wallet nor any associated Covered User Interface has custody of, or access to, the user’s encrypted or decrypted private key.
• “Crypto asset” means any digital representation of value that is recorded on a cryptographically secured distributed ledger. This definition is identical to the definition of “digital asset” in the GENIUS Act.³
• “Crypto asset securities” include tokenized versions of equity or debt securities. The Commission’s recent interpretative release on the application of the federal securities laws to crypto assets instead uses the term “digital securities,” which it defines as a financial instrument enumerated in the definition “security” that [are] formatted as or represented by a crypto asset, where the record of ownership is maintained in whole or in part on or through one or more crypto networks, commonly known as “tokenized securities.”⁴

Conditions; Permitted and Prohibited Activities

Covered User Interface Providers must implement several conditions to rely on the Statement’s position regarding broker-dealer registration.

These conditions include the establishment of policies, procedures, and controls designed to (i) evaluate the trading venues and blockchain-based trading systems (e.g., automated market maker (AMM) liquidity pools or liquidity aggregators) to which the Covered User Interface connects based on objective criteria (e.g., liquidity, latency, transparency, verifiability, neutrality, auditability, and security) and (ii) evaluate and periodically reassess default crypto asset security transaction parameters to address conflicts of interest and risks.

Covered User Interface Providers must also provide users with prominent disclosures addressing a range of potential risks and conflicts of interest, including a disclaimer that the Covered User Interface Provider is not registered with or regulated by the SEC, as well as disclosures regarding, among other things, transaction routing parameters, use of trading data, cybersecurity controls, and risks associated with transaction ordering (e.g., maximal extractable value (MEV)).

The following chart summarizes the permitted and prohibited activities for Covered User Interface Providers relying on the Statement. In addition, the Statement expressly does not extend to User Interface Providers that engage in activities that have historically been considered hallmarks of broker-dealer activity, including negotiating transactions terms, soliciting transactions, arranging for financing, executing or settling transactions, and taking custody of customer funds or securities.

Permitted	Prohibited
Providing customizable default transaction parameters	Recommending or negotiating transaction terms
Providing educational material to help users formulate and set transaction parameters	Providing advice on specific crypto asset securities or transactions
Soliciting use of the Covered User Interface	Soliciting specific crypto asset security transactions
Providing default trading venues or blockchain-based trading systems (e.g., AMM liquidity pools or liquidity aggregators)	Taking or routing orders, other than as described. If only one execution route is displayed, the interface must provide the ability to see additional routes, if applicable
Connecting or interacting with affiliated trading venues or blockchain-based trading systems with disclosure of affiliation and arms-length terms	Connecting or interacting with affiliated trading venues or blockchain-based trading systems without disclosure of affiliation or materially different terms to unaffiliated venues/systems
Providing tools (filtering, sorting) to display potential execution venues based on objective criteria (alphabetically, lowest/highest price, or speed)	Providing commentary on any execution route, such as “best price” or “most reliable”
Charging users transaction-based or flat fees, provided fees are calculated consistently and are product, execution route, execution venue, and counterparty agnostic	Receiving compensation from any person other than the user, including payments for order flow

Next Steps

• The Statement is an “interim step” and will be withdrawn in five years absent Commission action. Commissioner Hester Peirce released a statement commending the Staff but called for a “more permanent regulatory approach.”⁵ As with many recent Commission and Staff actions, feedback from the public is requested.
• The Statement addresses only broker-dealer registration under Section 15(a) of the Exchange Act and does not address other potential obligations under the federal securities laws for Covered User Interface Providers, including national securities exchange registration or antifraud liability (including potential secondary liability related to MEV and connected trading venues and trading systems).
• To the extent that the crypto asset security is an NMS stock, several questions arise about the compatibility of the relief with certain Regulation NMS requirements, such as the Vendor Display Rule (17 CFR 242.604).
• Covered User Interface Providers may provide similar services to those described in the CFTC’s recent no-action letter.⁶ However, the conditions imposed by the CFTC differ materially, including requiring relationships with CFTC registrants and the need to obtain individualized no-action relief. Covered User Interface Providers that also provide access to CFTC-regulated products will need to assess carefully the regulatory implications across regimes.
• Covered User Interface Providers should evaluate existing products and features against the Statement’s conditions, including reviewing user interfaces for any commentary or functionality that could be viewed as recommendations, assessing fee structures for compliance with the “agnostic” requirement, and implementing or enhancing policies for venue selection, default parameters, and periodic reassessment.

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¹ See, e.g., Letter to SEC Crypto Task Force on Behalf of Ava Labs re: Supplemental Submission Proposing a Nature of the Activity Test to Determine Whether Infrastructure Providers Need to Register as Securities Intermediaries (May 27, 2025) available here.
² See CFTC, Div. of Mkt. Participants, No-Action Letter No. 26-09 (Mar. 17, 2026), available at https://www.cftc.gov/csl/26-09/download (granting no-action relief to a developer of self-custodial crypto asset wallet software that provides a front-end interface enabling users to access market data and submit orders for CFTC-regulated derivatives, subject to conditions including the involvement of CFTC registrants and requiring the recipient to obtain individualized no-action relief).
³ Guiding and Establishing National Innovation for U.S. Stablecoins Act, Pub. L. No. 119-27, 139 Stat. 419 (2025).
⁴ See our previous alert, SEC Releases Landmark Interpretation on Application of U.S. Securities Laws to Crypto Assets, in Coordination With CFTC (Mar. 24, 2026), here.
⁵ Hester M. Peirce, Comm’r, SEC, Interfacing Our Inner Demons: Comments on the Division of Trading and Markets’ Statement on Certain User Interfaces (Apr. 13, 2026), available at https://www.sec.gov/newsroom/speeches-statements/peirce-041326-interfacing-our-inner-demons-comments-division-trading-markets-statement-certain-user-interfaces.
⁶ See note 3 above.

Knowledge management lawyer Daniel Engoren contributed to this Sidley Update.