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The CFTC issued a no-action position on Thursday protecting software developers from recommended enforcement over unregistered introducing-broker activity, provided they meet conditions including disclosures and compliance policies. The relief covers developers that act as a pipeline to designated contract markets and follows the agency's earlier no-action letter for crypto wallet provider Phantom.
The position broadens Phantom-specific relief into a framework other software providers can use. Solana Policy Institute General Counsel Patrick Wilson said it gives builders more clarity on connecting users to regulated derivatives markets without being treated as introducing brokers. A footnote also indicates the approach could extend beyond crypto asset-related software.
Why it matters
The CFTC's move came hours after the SEC released an innovation exemption intended to make room for onchain trading of tokenized stocks. Together, the actions point to regulators using targeted exemptions and no-action positions to advance their agendas after the Senate failed to advance the Clarity Act in a procedural vote.
For developers, the immediate benefit is a clearer route to build trading tools that connect users with regulated derivatives venues. Digital Chamber CEO Cody Carbone said the stance removes regulatory ambiguity that had chilled software innovation in derivatives markets.
Market impact
The decision could lower compliance uncertainty for crypto developers and support broader integration between wallets, trading software and regulated derivatives markets. It does not provide the permanence that industry participants sought from legislation, however. No-action positions can be reversed by a future commission.
CFTC Chair Michael Selig said in May that the agency was considering cementing the Phantom relief through rulemaking, but that step has not yet happened. Wider adoption of the framework could make the approach harder to reverse, while formal rulemaking would provide a more durable foundation.
Frequently asked questions
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What did the CFTC's new no-action position change for developers?
It says the CFTC will not recommend enforcement against qualifying software developers for not registering as introducing brokers, provided they meet conditions such as disclosures and compliance policies.
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Which developers qualify for the CFTC relief?
The position covers software developers that act as a pipeline to designated contract markets and satisfy the agency's required conditions.
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How does the position relate to Phantom?
The CFTC's earlier no-action letter addressed Phantom's planned derivatives functionality. Thursday's position expands that relief beyond the wallet provider to other software developers.
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Why is the CFTC action important for crypto markets?
It gives builders more clarity on connecting users to regulated derivatives markets and may reduce the regulatory uncertainty that has constrained derivatives software innovation.
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What is the main risk to the new regulatory approach?
A no-action position can be reversed by a future commission, so it does not offer the permanence of legislation or formal rulemaking. CFTC rulemaking to cement the Phantom relief has not yet happened.
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