The U.S. Securities and Exchange Commission (SEC) stated on Monday that software interfaces used to facilitate securities transactions via self-hosted wallets do not qualify as brokers.
In a new staff statement, the agency clarified that websites or software used by individuals to interact with their own wallets fall outside the broker-dealer regulatory category.
This guidance provides a specific checklist for developers to avoid regulatory triggers. To remain exempt, the software must not solicit investors for specific crypto asset securities transactions. Additionally, the interface must not provide commentary on potential execution routes displayed to a user.
Regulatory boundaries for developers
Software creators risk entering the agency's regulatory reach if their platforms offer financing or provide investment recommendations. The SEC also noted that any interface that handles user assets, takes orders, or executes transactions would be subject to regulation.
SEC staff described the document as an interim step. The agency is still considering various regulatory issues regarding crypto asset securities activities and reviewing industry feedback.
This move follows a shift in policy under SEC Chairman Paul Atkins. The agency's recent stance suggests developers should be able to write software without triggering broker-dealer regulations.
This statement joins a growing list of agency findings intended to provide clarity to the crypto industry. The current administration has pushed for a more streamlined regulatory path for digital assets.
