SEC Finalises Crypto Broker-Dealer Rules, Exchanges Have 18 Months to Comply
The SEC has published its final rules requiring cryptocurrency exchanges to register as broker-dealers, imposing capital requirements, custody standards, and AML obligations equivalent to those facing traditional securities firms.
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The Securities and Exchange Commission published its final cryptocurrency broker-dealer registration rules on Thursday, completing a two-year rulemaking process that will fundamentally reshape how digital asset exchanges operate in the United States.
All platforms trading securities under the Howey test — a category the Commission estimates covers roughly 70% of listed tokens by market cap — must register as broker-dealers by November 2027. Registered entities will face minimum net capital requirements of \,000, mandatory third-party custody of client assets, and monthly financial reporting obligations.
The rules also mandate 'proof of reserves' audits by PCAOB-registered accountants, require segregation of proprietary trading from client assets, and prohibit the payment of interest on customer deposits without additional licensing.
Based on my analysis of the rule text, the largest exchanges — Coinbase, Kraken, Gemini — are well-positioned to comply. All three have said they will register. The clearest losers are mid-tier platforms that lack the compliance infrastructure and capital to absorb the costs, which industry groups estimate at \-50 million per entity.
Bitcoin and Ethereum — designated as commodities by the CFTC — are explicitly excluded from the broker-dealer rules.
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