CFTC expands relief for passive crypto trading software — SkimNews
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- CFTC issued a Thursday no-action position from its Market Participants Division stating it will not recommend enforcement against qualifying passive software providers — or their personnel — for failing to register as introducing brokers or associated persons when connecting users to CFTC-registered firms and exchanges.
- Qualifying providers must limit their role in transactions, including restrictions on exercising discretion over users' orders, and the position could make it easier for crypto wallets and apps to offer access to regulated derivatives such as perpetual contracts and prediction markets without CFTC registration.
- The action extends a March no-action letter granted to Phantom Technologies for its self-custodial crypto wallet, following a July request from Phantom and the Hyperliquid Policy Center seeking broader protections for non-custodial wallet providers, blockchain developers, and firms using onchain infrastructure.
- The CFTC moved two days after the CLARITY Act failed in the Senate, where a cloture motion received 49 votes — 11 short of the 60 needed to proceed to debate.
- CFTC Chair Michael Selig posted on X that the agency is 'locked in and ready to ship its rules for the new frontier of finance,' while SEC Chair Paul Atkins said the SEC would act 'with or without legislation' to provide regulatory certainty for digital assets.
- On the same day, the SEC approved a temporary exemption allowing qualifying platforms to facilitate limited onchain trading of tokenized US stocks through permissioned automated market makers and liquidity pools.
Why it matters: Phantom Technologies and the Hyperliquid Policy Center explicitly lobbied for this exact relief in July, and the CFTC delivered it two days after the CLARITY Act's cloture motion fell 11 votes short (49 of 60). The expansion lowers the regulatory barrier for crypto wallets and apps to route users into derivatives and prediction markets without registering as brokers — materializing the agencies' post-failure pledge to act under existing authority.
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