Overview
- The SEC’s Trading and Markets staff on Monday set a conditional no‑enforcement stance for certain “covered user interfaces,” meaning DeFi front-ends and wallet apps that help people send trades from self-custody wallets.
- To qualify, interfaces must stay non-custodial, avoid investment recommendations or discretionary routing, rely on objective sorting of execution options like price or speed, and charge fixed, transparent fees with no payment for order flow.
- Providers must make clear disclosures about fees, conflicts, system mechanics, cybersecurity controls, and risks such as MEV, and they must document how they review connected trading venues for liquidity, transparency, security, and reliability.
- The staff statement is non-binding, fact-specific, and temporary with a five-year sunset, and it sits alongside the SEC’s developing “Reg Crypto” proposal and recent SEC–CFTC coordination on digital asset taxonomy.
- The carve-out is narrow, so platforms that hold user funds, execute or settle trades, take or route orders with discretion, negotiate deals, or run internal order books still face broker-dealer registration, even as industry groups praise the step as welcome clarity for builders.