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Compliance

Most teams are not blocked by engineering. They are blocked by whether shipping a product that pays interest creates obligations they cannot meet. Reflect is built around the control-based framework at the centre of the CLARITY Act. Reflect never holds your customers’ money, and where that money sits is decided by published rules rather than by anyone’s judgement. That framing follows US law. Nothing here is legal advice or should be relied on as such. What it means for your own position depends on your business and your markets, so form your own view with counsel.

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What Would Make You Regulated

Obligations attach to control, not to the product you are building. Three statuses matter, and each turns on whether someone can make decisions about other people’s money at their own discretion.

Custodian

What makes you one: holding your customers’ money.What happens instead: deposits are held by the contracts themselves. Nobody at Reflect and nobody at your company holds a key that can move them, and every movement of money is signed by the customer who owns it, including when they sign in with an email rather than a wallet. Redemption runs against the contracts directly rather than through an approval step. Protect junior positions carry a waiting period, set per market and published in advance.

Manager

What makes you one: deciding where your customers’ money goes.What happens instead: where deposits sit is determined by a published methodology built with Blockworks Advisory and carried out automatically. No one picks venues in the moment, and because the methodology is public, changes to it are visible rather than silent.

Issuer

What makes you one: issuing a claim against reserves you hold yourself.What happens instead: you hold no reserves. Every token is backed by assets sitting in the contracts, and holders redeem against those assets directly rather than against a promise from you.
CLARITY draws its lines the same way, by control rather than by asset type, and separates teams who build systems they do not control from institutions that operate them. It is not law, so Reflect works under the rules that exist today. That costs nothing, because the control test is not CLARITY’s invention.

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Where The Line Sits

Reflect holds no customer money, touches no cash, and leaves no allocation to anyone’s judgement. Obligations generally follow from activity outside the system rather than from the integration itself. This reflects how the question is approached in the United States; other jurisdictions draw the line differently, and your own facts govern.

Inside Reflect

Holding a balance that earns. Issuing your own token. Adjusting its risk. Moving between Reflect assets. All of it settles in the assets themselves, inside the contracts.No custody, no cash, and nobody choosing where the money goes.

Outside Reflect

Converting to or from cash. Bank accounts. Card issuance. Lending your own money against customer balances. Holding customer assets yourself.Regulated activity, and either yours to licence or your partner’s.
Your app converts their token back into USDC in a single step, then hands off to a licensed stablecoin payments provider. Reflect’s part was handing the customer their own money back. The regulated part is cash reaching the merchant, and the provider holds that licence.
Either way, you own the customer relationship: what you tell holders about what backs their balance, and any rate you quote them.

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Why Some Functions Are Gated Today

Routine upkeep moves money between approved venues as rates change, and sweeps earned interest into distribution. These operations carry out what the published rules already specify, and cannot direct money to a caller’s benefit, so there is no structural reason to restrict who runs them. Architecturally anyone can. Those calls are limited to approved callers during rollout because the rules are unsettled, not because the design requires it. The restriction lifts as the framework settles, and the architecture does not change when it does.

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Common Questions

Reflect involves no holding of customer money, no allocation decisions and no claim issued against reserves you hold. Licensing generally follows from activity outside the system, as above. Your own facts and markets determine the answer, and counsel should confirm it rather than this page.
No. Account abstraction removes the public key from the experience, not the control. Your customer signs in with an email address or the account they already have with you, and that only authenticates them to a key that stays theirs. Nobody at Reflect and nobody at your company can sign on their behalf, and there is no support desk holding balances or moving funds for people.
Reflect does not give an opinion on that, and nothing here should be read as one. Classification turns on how your token is structured, how you market it, who you offer it to and where.What Reflect does is keep the infrastructure clear of the features that usually attract the question. Only permissionless, freely transferable collateral is eligible, so assets carrying transfer restrictions or holder eligibility requirements are excluded by design. Reflect holds no reserves, so redemption runs against the backing assets themselves rather than a promise from anyone. Nothing in the design requires you to take discretion over what holders own.Your own choices still matter. A token with fixed composition, redeemable pro rata into what actually backs it, and not marketed on expected returns looks materially different from one whose mix is selected and revised for a fee. Take the version you intend to ship to counsel before you launch it.
The contracts are public and enforce no geographic restrictions, so deciding which markets you serve sits with your application. Treatment outside the United States varies and is moving, so take your own markets to your own counsel.
Losses fall on holders of the affected asset. There is no insurance fund and no guarantee of principal. For downside protection, Protect lets you hold a senior position where other capital absorbs losses first.
It passed the House in July 2025 and was advanced by the Senate Banking Committee in May 2026. It missed a floor vote before the August 2026 recess, a cloture motion on the motion to proceed was filed on 8 August, and the first procedural vote is expected after the Senate returns on 14 September. Passage requires 60 votes and remains genuinely uncertain.Last reviewed 10 August 2026.
The architecture does not change. The same control test runs through custody rules, adviser regulation, the SEC’s Regulation Crypto rulemaking expected to reach formal proposal in the second half of 2026, and decades of case law on who exercises discretion over whose assets. A system where nobody holds discretionary authority answers that question the same way under all of them. CLARITY would make the answer explicit rather than create it.
It was developed with counsel, and informed by conversations with people at and around the agencies that will administer these rules. That is not an endorsement from any of them, and nothing on this page is a compliance certification.
Offside Labs and Adevar Labs, across Reflect Core, yield routing and the whitelabel program. Every report is public in the audits repository.

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Risk

Risk types, collateral review and how losses are absorbed.

Audits

Offside Labs and Adevar Labs reports in full.
This page describes how Reflect is built. It is not legal advice, not an opinion on your regulatory position, and not a compliance certification. Regulation in this area is unsettled and moving. Form your own view with counsel who knows your markets.