DeFi Education Fund urges SEC
- DeFi Education Fund and 35 co-signers asked the Securities and Exchange Commission on April 21 to turn its new staff guidance on non-custodial crypto interfaces into formal rulemaking. - The coalition said wallet and app interfaces that translate user instructions into blockchain code are not brokers if users keep custody, while the SEC staff guidance otherwise sunsets after five years. - The push follows an April 13 staff statement that gave DeFi front ends temporary room but left enforcement risk unresolved without notice-and-comment rules. (sec.gov)
A crypto wallet is a tool for signing your own transaction, not handing your money to a broker. That distinction is at the center of a new DeFi industry push at the Securities and Exchange Commission. (sec.gov 1) (sec.gov 2) On April 21, the DeFi Education Fund and 35 other organizations and firms sent the SEC a letter supporting the agency staff’s recent approach to “Covered User Interfaces” and asking the Commission to lock it in through notice-and-comment rulemaking. (sec.gov) (defieducationfund.org) The letter says non-custodial interfaces are technical tools that convert user-selected trade details into blockchain-readable commands, while users still hold their own assets and submit their own orders. (defieducationfund.org) (sec.gov) The SEC’s Division of Trading and Markets had already issued that staff statement on April 13. It said certain websites, browser extensions, and mobile apps used with self-custodial wallets would generally not trigger broker-dealer registration on that fact pattern alone. (sec.gov) But the SEC also called the statement an “interim step” and said it will be withdrawn after five years unless the Commission acts sooner. The coalition’s letter says that makes formal rulemaking necessary if companies are going to rely on the guidance. (sec.gov 1) (sec.gov 2) The staff statement does not give every crypto interface a pass. It points to broker-like conduct such as soliciting investors, making investment recommendations, negotiating terms, or steering order routing decisions. (sec.gov) (theblock.co) That line matters because DeFi firms have spent months arguing that neutral front ends, wallets, and similar software should be judged by control over assets and transactions, not by the fact that they display prices or help format trades. In a February 10 submission, the DeFi Education Fund and Solana Policy Institute told the SEC that labels and interface design alone should not decide broker status. (sec.gov 1) (sec.gov 2) The coalition includes major crypto names such as a16z crypto, Uniswap, Chainlink, Aptos Labs, Paradigm, Solana Policy Institute, and Phantom, according to reporting on the filing. (msn.com) (crowdfundinsider.com) The SEC now has a live request to turn a temporary staff view into a durable rule. Until that happens, DeFi developers and wallet providers are still operating under guidance the agency itself says is not permanent. (sec.gov) (sec.gov)
