Key facts
- CFTC will not recommend enforcement against qualifying passive software providers for failing to register as introducing brokers.
- Providers must meet conditions limiting their role in transactions, including restrictions on exercising discretion over users’ orders.
- The action extends a similar position granted to Phantom Technologies in March for its self-custodial crypto wallet software.
- The SEC approved a temporary exemption for qualifying platforms to facilitate limited onchain trading of tokenized US stocks.
The Commodity Futures Trading Commission (CFTC) has expanded regulatory relief for "passive software" providers that connect users to regulated derivatives firms and exchanges. In a no-action position issued Thursday, the agency’s Market Participants Division stated it would not recommend enforcement against qualifying providers or their personnel for failing to register as introducing brokers or associated persons when facilitating trading with CFTC-registered firms and exchanges.
This position could make it easier for crypto wallets and other apps to offer access to regulated derivatives, including perpetual contracts and prediction markets, without becoming CFTC-regulated introducing brokers themselves. To qualify, providers must meet conditions limiting their role in transactions, such as restrictions on exercising discretion over users’ orders.
The action extends a similar position granted to Phantom Technologies in March for its self-custodial crypto wallet software. The earlier letter allowed Phantom, subject to certain conditions, to provide and market software connecting users with registered futures brokers and exchanges without registering as an introducing broker. Phantom and the Hyperliquid Policy Center had also pushed for broader protections in July, asking the CFTC to shield non-custodial wallet providers from introducing broker requirements and clarify how existing rules apply to blockchain developers and regulated derivatives firms using onchain infrastructure.
The move comes two days after the CLARITY Act failed to advance in the Senate. Following the vote, CFTC Chair Michael Selig and SEC Chair Paul Atkins signaled that their agencies would continue moving forward on crypto regulation under their existing authority. On Thursday, the SEC approved a temporary exemption allowing qualifying platforms to facilitate limited onchain trading of tokenized US stocks.