SEC Staff Clarifies Broker-Dealer Status of Self-Custody Wallet Interface Providers

Again reversing the policy position of the Securities and Exchange Commission under former Chairman Gary Gensler, on April 13, 2026, the staff of the Division of Trading and Markets issued a statement that providers of certain self-custody wallet interfaces, designed to facilitate user-initiated crypto asset securities transactions on a blockchain, need not register as broker-dealers under Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). The statement is part of a broader effort by the SEC to further the goals of the president’s Executive Order 14178 issued early last year, titled “Strengthening American Leadership in Digital Financial Technology,” by providing “regulatory clarity” and “well-defined jurisdictional regulatory boundaries.”

Back in June 2023, the SEC sued Coinbase, alleging, among other things, that Coinbase was operating as an unregistered broker-dealer in connection with Coinbase Wallet. Ultimately, the U.S. District Court for the Southern District of New York dismissed this claim because, among other reasons, Coinbase Wallet did not custody its users’ assets or engage in more than a de minimis level of order routing. Nevertheless, Enforcement Division staff investigated similar interfaces, notably those provided by Uniswap and MetaMask, over concerns that those providers were operating as unregistered brokers. These investigations ended in 2025 under then-Acting Chairman Mark Uyeda.

Functions of a Self-Custody Wallet Interface

A self-custody wallet interface is a website, browser extension, or software application that is designed to assist users in self-initiated transactions on a blockchain. Users provide a password (or, in the event it is forgotten or lost, a “seed phrase”) to decrypt locally stored private keys, which are used to validate ownership and authorize transactions of a crypto asset. Although users may directly interact with the blockchain to create legible commands, such as by submitting a transaction to a validator, doing so requires technical sophistication.

Self-custody wallet interfaces simplify interacting with a blockchain by providing a user-friendly option to, among other things, access, send, or exchange crypto assets. Such interfaces may route transactions in return for a commission. It is the potential for these interfaces to be used for order routing that was a basis for the claim by the SEC in Coinbase. The SEC alleged that Coinbase, as the operator of Coinbase Wallet, should be considered a broker.

Circumstances Not Requiring Broker Registration 

Self-custody wallet interfaces vary in form and function. In an effort to provide greater clarity as to how the staff would view a broad range of services provided by a self-custody wallet interface, the staff stated it would not require the operator of a self-custody wallet interface to register as a broker under the Exchange Act if the interface:

• Provides educational material to help users formulate transactions;
• Permits users to customize transactions;
• Selects one or more trading venues as defaults on the interface;
• Discloses affiliation with trading venues where it connects the user to the venue and provides that connection on the same terms and conditions as interfaces unaffiliated with those venues;
• Provides the ability to see other routes where only one execution route is displayed;
• Filters or sorts potential routing destinations based on objective factors;
• Uses pre-disclosed, objective, and independently verifiable parameters in preparing a user’s trading instructions or in displaying related market data; or
• Charges fees on a fixed basis based on objective factors and is agnostic to product, execution route, execution venue, and counterparty.

In contrast, the staff stated that the views it expressed with respect to whether a provider of a self-custody wallet interface should register as a broker-dealer under the Exchange Act, based on the activities summarized above, do not apply if the interface:

• Solicits investors for specific transactions;
• Negotiates terms for any transaction;
• Recommends investments or provides advice;
• Arranges financing;
• Processes trade documentation;
• Conducts independent asset valuation;
• Holds, accesses, handles, manages, or possesses user funds, securities, or stablecoins;
• Executes or settles transactions;
• Routes orders, as opposed to displaying potential execution routes without any commentary on those routes; or
• Exercises control or discretion over the market information displayed or securities transactions.

Required Policies, Procedures, and Disclosures

In addition to limiting such activity, the self-custody wallet interface provider must establish policies, procedures, and controls that are reasonably designed to: (a) evaluate, onboard, and audit trading venues the interface connects to for market data based on objective factors; (b) evaluate, determine, and periodically reassess any default transaction parameters based on objective criteria; and (c) address conflicts of interest or risks associated with the default transaction parameters.

Furthermore, the staff’s statement requires self-custody wallet interface providers to prominently disclose to the user, and promptly update as necessary, material facts related to:

• The provider’s role relating to its creation, offering, and/or operation of an interface, including a prominent disclaimer that it is not registered with the SEC.
• The calculations and structure of the provider’s fees.
• Material conflicts of interest regarding use of transaction information.
• Limitations, permissions, or restrictions regarding assets, market data, and trading venues that are available for use on the interface.
• Parameters used for preparing trading instructions and displaying market data for execution routes.
• The provider’s cybersecurity and privacy protections, procedures, and controls, if any, for the interface and user trading information.
• The provider’s policies, procedures, and controls to evaluate, onboard, and audit trading venues, as well as the existing integrations with trading venues.
• The provider’s policies, procedures, and controls to address default transaction parameters and associated conflicts of interest or risks, as well as the existing default transaction parameters.

To help demonstrate that a self-custody wallet interface is not a broker, the staff recommends that the self-custody wallet interface provider establish, maintain, and enforce policies and procedures relating to the interface’s operations, and maintain books and records.

The staff is currently seeking input from the public on its statement, and there will likely be comments on certain ambiguities. One example could be how the staff would view the necessity to make judgments as to the relevance of market information for inclusion in an interface. Another example could be the extent to which a self-custody wallet interface may have arrangements with validators that could affect execution priority.

The statement aligns with prior scholarship concluding that providers of certain self-custody wallet interfaces should not be required to register as brokers.. Carlton Fields has extensive experience advising on these issues and will continue to monitor developments and offer guidance on their potential impact on the financial services industry.