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Hyperliquid Policy Center (HPC) and Phantom submitted a joint comment letter to the CFTC urging the agency to clarify that publishing onchain protocol software does not require registration as a derivatives market intermediary. The letter also asks the CFTC to formalize a clear pathway for regulated exchanges and clearinghouses to adopt onchain infrastructure, and to codify the existing Phantom non-action letter into a formal rule.
Why it matters
The letter is a coordinated ask from two of the more visible names in onchain perpetuals and self-custodial trading. The argument: the current CFTC framework was built for custodial intermediaries with opaque balance sheets, and it does not map cleanly onto transparent, self-custodial onchain markets. Clarifying that publishing protocol code is not, by itself, a regulated activity would let US-licensed venues integrate onchain rails without forcing every protocol contributor into the exchange registration pipeline.
Market impact
Codifying the Phantom non-action letter into a rule would convert a one-off enforcement-discretion outcome into a predictable safe harbor, lowering the legal cost of building onchain market infrastructure in the US. The bigger read is timing: traditional exchanges and clearinghouses have been exploring onchain settlement for two years, and most are waiting on a regulatory green light before committing capital. A clear CFTC posture on protocol publishing would be the unlock that lets that integration move from pilots to production.
Frequently asked questions
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What did Hyperliquid Policy Center and Phantom ask the CFTC to do?
They filed a joint comment letter asking the CFTC to clarify that publishing onchain protocol software does not require registration, create a pathway for regulated exchanges and clearinghouses to adopt onchain infrastructure, and codify the Phantom non-action letter into a formal rule.
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Why are they asking the CFTC to clarify this now?
The current CFTC framework was designed for traditional custodial intermediaries with opaque balance sheets, and the letter argues it does not map cleanly onto transparent, self-custodial onchain markets.
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What is the Phantom non-action letter?
It is a prior enforcement-discretion outcome involving Phantom. The new letter asks the CFTC to convert that one-off relief into a formal rule, creating a predictable safe harbor for protocol publishers.
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How would this affect traditional exchanges and clearinghouses?
Clarifying that protocol publishing is not itself a regulated activity would let US-licensed venues integrate onchain rails without forcing every protocol contributor into the exchange registration pipeline.
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What would be the broader market impact if the CFTC acts on this?
A formal rule would lower the legal cost of building onchain market infrastructure in the US and could unlock capital from traditional exchanges and clearinghouses that have been running onchain settlement pilots but waiting on regulatory clarity before committing.
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