The SEC has issued its first guidance exempting brokers from registration requirements for non-custodial crypto asset transactions, effective until April 2031, laying the legal groundwork for the DeFi ecosystem in the US.
The U.S. Securities and Exchange Commission (SEC) has just released landmark guidance, clarifying for the first time the conditions under which non-custodial cryptocurrency services can be exempt from broker registration requirements under the Securities Exchange Act. This move is seen by experts as a significant policy signal that could boost the legitimate development of decentralized finance (DeFi) in the world's largest market.
The SEC 's Transactions and Markets Division has determined that the scope of regulation focuses on "Covered User Interfaces," including websites, mobile applications, and browser extensions that connect to non-custodial wallets, display market data such as asset prices, execution routes, and network fees, but do not directly hold or control users' assets. This guidance is provisional until April 2031.
The legal boundaries are clearer, but the conditions are far from easy.
To qualify for an exemption from the SEC, platforms must meet a strict set of criteria. The platform must not promote specific trades, participate in order execution, or provide any form of investment advice. Users must set all trading parameters themselves; the system only Vai as a technical processor. The fee structure must be fixed and transparent, for example, as a percentage of the trade value, and platforms are prohibited from claiming any method is “the best” or “the most reliable.”
In terms of cybersecurity, the SEC requires disclosure of measures to protect transaction data and address systemic manipulation risks, including the threat of maximum mining value (MEV), a long-standing legal blind spot in the cryptocurrency market. Additionally, developers must implement an integrated platform evaluation process based on objective criteria such as liquidation, speed, security, and transparency, and utilize independently verifiable algorithms.
The SEC emphasized that this document reflects internal professional views, is not formal legal regulation, and does not create new obligations. The agency is still developing a comprehensive legal framework for cryptocurrencies and is now open to public comment. Nevertheless, investors and fintech developers have welcomed this move as a step closer to the regulatory body's understanding of the operational realities of the global decentralized market.
