Key facts
- CFTC will not pursue enforcement actions against crypto developers building trading tools for derivative products under specific conditions.
- Developers must not be subject to statutory disqualification.
- Users of the trading tools must be direct members of the derivative exchange and able to access it independently of the developer.
- Developers must not engage in certain types of advertising or promotions.
- Developers must file a notice with the CFTC agreeing to conditions and consenting to the Commission's jurisdiction.
The Commodity Futures Trading Commission (CFTC) has provided a regulatory pathway for crypto developers creating trading tools for derivative products. In a press release, the Commission's Market Participants Division announced a no-action position, meaning it will not pursue enforcement actions against these developers for failing to register as introducing brokers, provided they meet a set of ten conditions. This move aims to offer clarity to the crypto industry, which has been navigating regulatory uncertainty, particularly after the Senate's failure to pass the CLARITY Act.
Key conditions for developers include not being subject to statutory disqualification and ensuring that users of their trading tools are direct members of the Commission-regulated derivative exchange and can access it independently. Developers must also refrain from certain types of advertising and promotions that would require pre-approval if they were registered brokers. Furthermore, they must file a notice with the CFTC, agreeing to these conditions and consenting to the Commission's jurisdiction for any violations related to their covered activities.