U.S. derivatives regulators moved to reduce a registration hurdle for software providers connecting users with regulated markets.
The CFTC’s Market Participants Division issued a no-action position Thursday for passive software providers. The relief covers software used to connect users with registered futures commission merchants, introducing brokers and designated contract markets. Providers must meet specific conditions, including disclosure requirements and internal policies.
The position expands relief first granted to crypto wallet provider Phantom in March. The earlier relief covered Phantom’s software for facilitating user trading with registered FCMs, IBs and DCMs.
The new position applies more broadly to qualifying passive software providers. The CFTC said staff would not recommend enforcement for failing to register as an introducing broker when providers meet the specified conditions.
The protection applies only to qualifying software activities. A footnote also indicates that the framework is not limited to crypto-related applications.
Solana Policy Institute General Counsel Patrick Wilson called the move a broader framework for developers. “That gives builders more clarity about how they can connect users to regulated derivatives markets without being treated as introducing brokers.”
The CFTC action follows the SEC’s innovation exemption for onchain tokenized stock trading. Both agencies have continued pursuing crypto-related regulatory initiatives after the Senate stalled the CLARITY Act.
However, the CFTC’s position is staff-level no-action relief rather than a permanent exemption from registration. CFTC Chairman Michael Selig previously discussed turning the Phantom relief into formal rules.
