SEC shifts to 'neutral tool' framework for crypto interfaces to avoid broker registration

Crypto trading apps and self-custodial wallet interfaces can now avoid broker-dealer registration if they function as neutral tools. In a staff statement issued April 13, 2026, the SEC Division of Trading and Markets outlined the conditions under which 'Covered User Interface Providers' may operate without registration.

To maintain this status, platforms must not recommend trades, provide investment advice, or promote specific tokens or trading routes. They are barred from executing trades, negotiating transactions, or handling customer assets, restricting their role to displaying information and routing user instructions. Fees must be transparent and consistent across all assets and execution paths, and providers must disclose their conflicts of interest, cybersecurity controls, and their non-registered status.

This framework is an interim staff position that will expire in five years unless replaced. It arrives as the SEC is advancing a broader 'Reg Crypto' framework under Chair Paul Atkins. Currently under review by the Office of Information and Regulatory Affairs, the proposed rules seek to update token fundraising and decentralized finance activities, including creating a safe harbor for tokens that transition out of securities status.