SEC Issues New Guidelines for Broker-Dealers on Digital Assets

The US Securities and Exchange Commission (SEC) has issued new guidelines that could pave the way for broader institutional use of digital assets. In an updated FAQ released on May 15, the agency clarified how existing securities laws apply to broker-dealers and transfer agents involved in crypto services. This move is seen as a significant step forward for the integration of cryptocurrencies into traditional financial systems.

SEC Commissioner Hester Peirce noted that the guidance is “incremental, not comprehensive,” indicating that more extensive regulatory updates are still in progress. She emphasized that many of the responses in the FAQs simply reiterate existing rules or clarify what the regulations do not cover.

Chainlink, a decentralized oracle network, welcomed the update, stating that it addresses long-standing concerns from financial institutions about using public blockchains for recordkeeping, compliance, and data privacy. The guidance was reportedly shaped by closed-door meetings between Chainlink Labs and the SEC Crypto Task Force in March. During these meetings, Chainlink’s legal delegation presented workflows demonstrating how smart contracts and privacy-preserving middleware could uphold securities law on public chains. Co-founder Sergey Nazarov also briefed staff on a cross-chain transfer-agent architecture that mirrors legacy processes but with automated compliance built in.

These sessions reportedly helped the SEC craft language around “unified golden records” and “smart-contract–driven compliance checks,” which now appear in the FAQ. The update outlines how regulatory requirements like custody obligations and capital rules interact with digital assets. According to the SEC, broker-dealers holding non-security crypto, like Bitcoin and Ethereum, are not subject to the customer protection rules under Rule 15c3-3, which apply only to securities. This distinction gives firms more precise boundaries on what types of digital assets fall within traditional custody rules.

Additionally, the guidance clarifies how broker-dealers should treat positions in digital assets for net capital purposes. While the focus remains on Bitcoin and Ethereum, which currently underlie approved exchange-traded products, the SEC notes that this does not imply broker-dealers are restricted to holding only those two assets. However, the agency also cautioned that digital assets not classified as securities do not benefit from protections under the Securities Investor Protection Act, meaning customers may be exposed to additional risk when holding non-security crypto through registered firms.

Beyond broker-dealer guidance, the updated FAQs also tackle how transfer agents can leverage distributed ledger technology, including public blockchains, to maintain securities records. The SEC states that transfer agents may use DLT as their official Master Securityholder File, provided they meet all recordkeeping, compliance, and reporting obligations under current securities law. The Commission added that the specific technology used is at the discretion of the transfer agent, as long as the records remain secure, accurate, accessible to the SEC, and preserved for the required duration.

The immediate implication is that US financial institutions can begin moving core fund operations on-chain, adopting regulator-approved and battle-tested infrastructure. This opens the door to massive cost savings for the global fund-administration market. For Chainlink, it’s a vindication. With CCIP now powering real-world institutional pilots and its team having helped shape federal policy, the project looks increasingly like the connective tissue between traditional finance and compliant on-chain finance.

After years of regulatory gridlock, the US has effectively sanctioned public blockchains for use in securities infrastructure. Chainlink, already embedded with institutions and now with policy influence in Washington, appears positioned to become the de facto middleware for the future of tokenized finance.