US SEC Opens Narrow Safe Harbour for Crypto Interfaces To Avoid Broker Rules

In a staff statement released on 13 Apr, the regulator said it would not object to certain interfaces facilitating crypto asset securities transactions without registration, as long as they function as neutral tools and do not influence trading decisions. 

The guidance applies to software such as websites or wallet-based applications that translate user inputs into blockchain transactions, such as self-custodial wallets. To qualify, interfaces must avoid recommending trades and allow users to fully control trade settings. 

Enforcement backdrop 

The role of interfaces has been a central issue in several SEC enforcement efforts against crypto firms. 

In cases involving platforms such as Uniswap Labs, regulators examined whether frontend interfaces could be treated as intermediaries even when transactions are executed through autonomous smart contracts. 

The SEC has previously argued that interfaces facilitating access to liquidity, routing trades or simplifying execution may fall within broker or exchange definitions, regardless of whether they take custody of user funds. 

That approach has drawn criticism from industry participants, who argue that such interfaces function as software tools rather than financial intermediaries. The latest guidance narrows that interpretation by carving out a category of interfaces that may avoid registration if they remain strictly neutral.  

Legislative gridlock 

The agency has continued to rely on incremental guidance to clarify the treatment of digital assets as broader market structure legislation remains stalled in Congress.  

Lawmakers have struggled to advance a unified framework governing crypto markets, with disagreements over whether third-party platforms and affiliates should be prohibited from offering 'yield-like' rewards to stablecoin users. This dispute over the boundary between stablecoins and traditional bank deposits has held up legislative progress since January.