SEC staff: Self-custodial wallet UIs may not be brokers

The Securities and Exchange Commission’s Division of Trading and Markets staff said on Monday that certain user interfaces on self-custodial crypto wallets may not be required to register as broker-dealers if their activity is limited to passive assistance for user-initiated crypto asset securities transactions.

The staff statement says an interface is less likely to need broker-dealer registration when it does not solicit users to engage in specific crypto asset securities transactions, does not comment on or recommend among execution routes displayed to a user, and confines its role to helping a user access blockchain protocols with the user’s private keys. A self-custodial wallet is one where the user controls the private keys for the account.

The document reflects the view of the Division of Trading and Markets staff and is not a formal SEC rule. The statement was described as guidance to clarify how federal securities laws apply to activities involving crypto asset securities; it is not subject to the notice-and-comment process that accompanies formal rulemaking.

The guidance follows other staff statements issued since the new administration took office in January 2025 and after changes in agency leadership. The SEC currently has three commissioners in office, all Republicans, leaving two vacancies. The Commodity Futures Trading Commission is operating with Chair Michael Selig as its sole sitting commissioner. The White House did not include nominees for the SEC or CFTC in a recent round of presidential appointments, and some senators have proposed requiring minimum staffing levels at the two agencies as part of pending market-structure legislation.

Broker-dealer registration requires firms that effect securities transactions for others to register with the SEC and meet supervision, recordkeeping and capital rules. Crypto firms and wallet providers have sought clearer lines between passive software that enables direct user transactions and intermediaries that solicit or execute trades on behalf of customers.

Commissioner Hester Peirce welcomed the staff view while urging more durable rulemaking, adding, “While the staff expressing its view is helpful, I favor a more permanent regulatory approach that addresses the broker definition in light of current market circumstances. Crypto is forcing the Commission to confront its inner demons that have driven it toward ever more expansive readings of the securities laws.”

The staff statement sets out criteria for when an interface that connects a user’s self-custodial wallet to blockchain protocols might be treated as a facilitator rather than a broker under federal securities laws.