Crypto Trading Sites Can Skip Broker Rules, Says SEC

The U.S. Securities and Exchange Commission (SEC) has issued new guidance that allows certain crypto‑trading apps to bypass the typical broker‑dealer registration. This applies only to user interfaces that help users send orders with self‑custodial wallets, not to firms that actually execute trades or provide advice.

Key Conditions for Compliance

• Neutral Gateway
• Must act purely as a conduit; no trade recommendations, price influence, or venue favoritism.

• Fees must be flat and clearly visible; cannot depend on execution outcome.

• User Control
• Users can set their own limits and choose speed or cost preferences.
• Routing must follow pre‑announced, fair rules for all participants.

• No Advisory or Editorial Content

• Operators cannot provide investment tips or editorial guidance on market selection.

• Transparency About Ties
• Disclose any relationships with exchanges or liquidity pools.
• Offer filtering based on objective data (price, speed) rather than marketing slogans.
• Do not label a route as “best” unless backed by neutral evidence.

Scope and Duration

• Short‑Term Experiment
• The rule lasts five years unless the SEC revises it.
• Exclusions
• Platforms that negotiate deals, hold money, or give investment advice must still register as brokers.

The SEC aims to keep the crypto space open for innovation while preventing conflicts of interest and ensuring transparency.