The US Securities and Exchange Commission has announced that software enabling users to conduct securities transactions through their individual crypto wallets will not require registration and regulation as a broker. This latest statement from the SEC's staff provides guidance on the agency's stance on crypto regulations, allowing the industry to move forward in the absence of permanent rules. The statement emphasizes that websites or software used for securities transactions with self-hosted wallets will not be considered broker-dealers, aligning with the agency's recent position that developers should be able to create software without triggering such regulations.
To avoid being classified as a broker-dealer, the creators of these interfaces must ensure that their software does not solicit investors for specific crypto asset securities transactions, provide commentary on potential execution routes, offer financing, provide investment recommendations, handle user assets, take orders, or execute transactions. The SEC is working on developing permanent rules for crypto asset securities activities, with the agency's chairman indicating that wide-ranging rules are nearing the proposal stage. In the meantime, the agency is providing interim guidance to provide certainty for the industry.