Overview
On April 13, 2026, the US Securities and Exchange Commission (the SEC)’s Division of Trading and Markets (the staff) issued a statement (the statement) outlining when providers of certain crypto asset user interfaces can operate without registering as broker dealers under the Securities Exchange Act of 1934.
The statement provides some regulatory comfort for self hosted, non custodial interfaces, but clearly draws a line between permissible user interface (UI) and technology layer activity and broker dealer functions, including execution, order routing, discretion, and custody.
The statement preserves the exemption relied upon by many decentralized finance (DeFi) market participants that function solely in the non-custodial capacity and do not “exercise any control or discretion over, or engage in any decision-making regarding, the market information provided, or securities transactions.” At the same time, the statement expressly excludes providers that route or execute transactions in assets that would be treated as securities, even when those activities are carried out through a self-custody model.
The statement reflects the views of the staff only and addresses broker-dealer registration issues. Absent action by the SEC, the statement will be withdrawn after five years. Commissioner Hester Peirce, in a separate statement released the same day, also emphasized that the statement provides short-term guidance and the need for a more permanent regulatory solution.
In Depth
Covered user interfaces
The statement applies to “covered user interfaces,” which are “interface[s] provided by a website, browser extension, or other software applications … designed to assist users [in preparing] user-initiated crypto asset securities transactions … utilizing [a] self-custodial wallet.” As described by the staff, these interfaces are designed to help users translate transaction terms “into blockchain-legible commands” that can be signed and transmitted through the user’s wallet.
Covered user interfaces may also display asset prices, estimated transaction costs, or potential execution routes. The staff makes clear that the statement only applies to interfaces that function solely to “prepare code enabling users to interact with blockchain protocols” Interfaces that “execut[e] or settl[e] transactions” fall outside the scope of the statement.
Clear line between UI technology and broker activity
A core theme of the statement is the distinction between neutral UI functionality and broker dealer conduct. The staff reiterates that any person “engaged in the business of effecting transactions in securities for the account of others” must register as a broker dealer unless an exemption applies. (See also 15 U.S.C. § 78c(a)(4).) To remain outside that definition and avoid broker-dealer status, the person who creates, offers, or operates covered user interfaces (i.e., covered user interface providers) must not “execut[e] or settl[e] transactions,” “tak[e] or rout[e] orders,” “hold[] [or] access … user funds,” or “provid[e] [investment] advice” or recommendations.”
The staff makes clear that execution, routing, and custody remain broker dealer functions regardless of whether those activities occur on-chain or through automated systems.
Sorting and display of execution routes
The way an interface displays and organizes execution routes is one of the most important aspects of the statement. The staff will not object to interfaces that show multiple execution options or provide filtering and sorting tools only where those tools rely on objective, pre-disclosed, and independently verifiable criteria, such as transaction price or speed.
The statement clarifies that a covered user interface may not suggest that one route offers the “best price” or is the “most reliable.” The staff signals that this kind of subjective ranking can amount to discretion built into the software itself and can bring the interface closer to broker-dealer activity, even if the interface does not hold assets or execute trades directly. Discretion built into software design itself raises regulatory risk to be classified as a broker-dealer.
SEC Commissioner Peirce’s insight
In her separate statement issued on April 13, 2026, SEC Commissioner Hester Peirce welcomed the clarity provided by the statement but cautioned against reading the broker-dealer definition too broadly. Commissioner Peirce noted that “wallets and interfaces do not become ‘brokers’” simply because they enable self-custody, display on-chain data, or transmit transaction instructions to a blockchain.
Commissioner Peirce warned that requiring registration for tools that merely “touch the financial services industry” could discourage innovation. Commissioner Peirce emphasized that the statement is only a temporary measure because it will be withdrawn after five years unless the SEC takes further action. Commissioner Peirce outlined how a more permanent regulatory solution is needed to address the broker definition in light of evolving market structures.
Key takeaways and limitations
The statement draws a clear line between UI tools and broker-dealer activities under the Exchange Act. Trade execution, order routing, settlement, and custody remain broker dealer activities, even when performed through automated or on-chain systems. Interfaces that simply help users prepare transactions and view information using self hosted, non custodial wallets are more likely to fall within the staff’s non objection position.
The statement makes clear that broker dealer risk is not limited to custody or direct control over trades. How execution options are ranked or described can also create broker-dealer risk. User interface providers can no longer claim an exemption from broker-dealer registration solely because the interface operates on a non-custodial basis.
The statement offers narrow and temporary guidance, reflecting only the views of the staff and applying to broker-dealer registration issues. It will expire in five years unless the SEC takes further action. Even so, it is likely to shape regulatory expectations in the near term.
McDermott Will & Schulte’s FinTech and blockchain team can help clients navigate the nuances and practical implications of the SEC’s staff statement and related regulatory developments. The firm’s crypto team is the largest crypto-exclusive team in the industry, with lawyers who dedicate 100% of their time serving the crypto industry and a dedicated sub-team focused on crypto regulatory and licensing matters. McDermott Will & Schulte is one of the few firms ranked Band 1 by Chambers USA in crypto-asset disputes.
Jordan Zaia, a law clerk in New York office, also contributed to this client alert.