The U.S. Securities and Exchange Commission has been narrowing how certain broker-dealer and trading rules apply to crypto assets, with staff guidance clarifying that non-security digital assets fall outside specific customer protection requirements. The moves signal a broader shift in how registered firms may handle crypto activity under existing securities frameworks.
The most concrete action came on May 15, 2025, when the SEC’s Division of Trading and Markets published a set of FAQs addressing crypto asset activities and distributed ledger technology. The staff guidance stated that Rule 15c3-3(b), a key broker-dealer customer protection rule governing the handling of customer securities, does not apply to crypto assets that are not classified as securities.
The same FAQs confirmed that national securities exchanges and alternative trading systems are not prohibited from offering pairs trading involving a crypto asset security alongside a non-security crypto asset, provided they comply with existing federal securities laws and Regulation ATS disclosure requirements.
The guidance represents staff-level views, not a formal Commission rule, regulation, or approved statement. That distinction matters for firms weighing compliance decisions based on the clarifications.
What Rule 15c3-3 Requires and Why the Clarification Matters
Rule 15c3-3, known as the Customer Protection Rule, requires broker-dealers to safeguard customer funds and securities. It imposes strict obligations around how firms hold and segregate assets, including maintaining reserve accounts and limiting the use of customer property.
By clarifying that non-security crypto assets sit outside this rule’s scope, the SEC staff effectively reduced a layer of regulatory uncertainty for broker-dealers that custody or transact in tokens they do not consider securities. Trading desks and market makers handling assets like Bitcoin or other non-security tokens may find fewer compliance hurdles when structuring their operations.
The pairs-trading clarification is similarly significant. Exchanges and ATSs can now point to explicit staff guidance when facilitating markets where a crypto security trades against a non-security crypto asset, as long as the securities-law side of the transaction is properly handled.
A separate joint SEC-CFTC staff statement issued on September 2, 2025 reinforced this direction, noting that registered exchanges are not prohibited from facilitating trading in certain spot crypto asset products.
Staff Guidance, Not a Rule Change
SEC Commissioner Hester Peirce framed the FAQs as limited in scope. “These FAQs are incremental, not comprehensive,” Peirce stated in remarks published the same day the guidance was released.
That characterization is important context. The guidance does not amount to a formal rulemaking proposal or a blanket exclusion of crypto from over-the-counter market regulations. It reflects staff interpretation of how existing rules apply, which can be revised or superseded by future Commission action.
No official SEC proposal, order, or no-action letter has been identified that explicitly carves crypto assets out of a named OTC quotation rule such as Rule 15c2-11. The headline framing of the SEC “excluding crypto assets from OTC market rules” overstates what the current evidence supports.
What the record does show is a pattern of incremental staff-level clarifications aimed at reducing friction for registered firms engaging with crypto. The broader trajectory under the SEC’s current leadership has been described by credible coverage as a reset toward clarifying, rather than expanding, how securities rules apply to digital assets.
What Firms and Traders Should Watch
The distinction between staff guidance and formal rulemaking carries practical weight. Staff FAQs can be withdrawn or modified without the notice-and-comment process required for rules. Firms relying on these clarifications face residual regulatory risk if the Commission’s posture shifts.
The coordinated SEC-CFTC statement from September 2025 suggests interagency alignment on allowing registered venues to engage with spot crypto products. Whether that alignment produces formal joint rulemaking remains an open question with no announced timeline.
For crypto businesses making compliance decisions now, the safest read is that the SEC staff has signaled non-security crypto assets are not subject to certain broker-dealer custody and protection rules. That is a meaningful clarification, but it is not the same as a Commission-level rule change exempting crypto from OTC market regulation.
Market participants tracking this space may also want to monitor how these regulatory shifts interact with broader crypto market developments, including Bitcoin’s recent price recovery and the evolving landscape for digital asset trading infrastructure.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.