The US Securities and Exchange Commission (SEC) has issued fresh guidance that could facilitate broader institutional use of digital assets.
In a May 15 updated FAQ, the agency addressed how existing securities laws apply to broker-dealers and transfer agents involved in crypto services.
Commenting on the development, SEC Commissioner Hester Peirce noted that the guidance is “incremental, not comprehensive,” signaling that broader regulatory updates are still underway.
She added:
“Many of the responses to these FAQs should not be controversial, as they simply reiterate what our rules already say or do not say.”
Meanwhile, Chainlink welcomed the update, calling it a significant step forward because it addresses long-standing concerns from financial institutions about using public blockchains for recordkeeping, compliance, and data privacy.
While the SEC’s guidance dropped with little fanfare, sources and records indicate it was shaped, in part, by a pair of closed-door meetings between Chainlink Labs and the SEC Crypto Task Force in March.
Earlier this year, 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 then briefed staff on a cross-chain transfer-agent architecture that mirrors legacy processes but with automated compliance baked 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 itself.
SEC’s crypto guidance
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 the 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 BTC and ETH, which currently underlie approved exchange-traded products (ETPs), 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 (SIPA). That means 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 (DLT), 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.
What this means for markets and Chainlink
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 $132 trillion 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 TradFi and compliant on-chain finance.
| Date | Event |
|---|---|
| Mar 24 2025 | Chainlink legal team meets SEC Crypto Task Force |
| Mar 28 2025 | Sergey Nazarov briefs SEC on cross-chain transfer-agent model |
| May 12 2025 | SEC Tokenization Roundtable—Atkins sets pro-blockchain tone |
| May 15 2025 | Division of Trading & Markets publishes blockchain FAQ |
Bottom line
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.
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