CryptoSlate
Phantom and the Hyperliquid Policy Center asked the CFTC on July 9 to remove rules they say unduly impede fintech firms from working with registered derivatives markets, framing themselves as software in the middle rather than custodians. Users would keep control of funds and private keys while trades route directly to registered venues, brokers, and clearinghouses; the filing builds on a Mar. 17 no-action letter in which the CFTC's Market Participants Division told Phantom it would not recommend enforcement action if the wallet failed to register as an introducing broker for a specific kind of software access to registered FCMs, introducing brokers, and designated contract markets.
Why it matters
The March relief was staff-level and fact-specific, with the CFTC reserving the right to void or modify it on different facts. The July filing pushes for a broader, codified version of that logic covering any wallet in Phantom's position, asking for three concrete asks: protocol developers should not trigger registration merely for building on-chain software, registered exchanges and clearinghouses should get a clear path to perform execution, margining, and recordkeeping on public blockchains, and non-custodial wallets should not be classified as introducing brokers when they provide technical access. The wallet, in this model, never touches orders, funds, or execution; the registered collaborator holds the assets and runs the risk engine.
The filing lands as Coinbase and Kalshi rolled out regulated perpetual crypto futures for US investors in May, the first domestic regulated venue access to perps offering up to 50-to-1 margin. Global perpetual futures volume hit $61.7 trillion in 2025, so even 1% migrating into regulated US channels equals roughly $617 billion and 5% would amount to over $3 trillion, a pool that today lives mostly offshore.
Market impact
If the CFTC codifies broader guidance, perps, event contracts, and tokenized derivatives could land inside the wallet apps investors already use, shifting pricing power and distribution away from brokers and exchanges toward wallet front-ends. The May 29 CFTC advisory on 24/7 trading, clearing, and settlement warns that continuous access brings thinner liquidity, wider spreads, more manipulation risk, and operational and cybersecurity exposure that demands real-time surveillance. The bear case leaves wallet-based derivatives behind a regulatory gate, US users in broker or exchange accounts, and on-chain perps offshore or geofenced.
Frequently asked questions
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What did Phantom and Hyperliquid actually ask the CFTC to do?
In a July 9 letter, Phantom and the Hyperliquid Policy Center asked the CFTC to convert a narrow March no-action letter into a broader, codified rule covering any non-custodial wallet, so software-only interfaces can connect users to registered derivatives venues without triggering broker registration.
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What does Phantom's March no-action relief actually cover?
On Mar. 17, the CFTC's Market Participants Division told Phantom it would not recommend enforcement if Phantom failed to register as an introducing broker for a specific kind of software access to registered FCMs, introducing brokers, and designated contract markets. The relief is staff-level, fact-specific, and…
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Why does this matter now that Coinbase and Kalshi have US perps?
Coinbase and Kalshi rolled out regulated US perpetual futures in May, the first domestic regulated venue access to perps with up to 50-to-1 margin. The Phantom letter extends the same regulated product set into wallet front-ends, where most US crypto users already live.
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How big is the on-chain perp market the filing targets?
Global perpetual futures volume reached $61.7 trillion in 2025. Even 1% of that migrating into regulated US channels equals roughly $617 billion, and 5% would amount to over $3 trillion, a pool that today lives mostly offshore or in unregulated venues.
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What risks did the CFTC flag around 24/7 wallet-based derivatives?
The CFTC's May 29 advisory on 24/7 trading, clearing, and settlement warned that always-on access brings thinner liquidity, wider spreads, more manipulation risk, and operational and cybersecurity exposure that demands real-time surveillance at a level most consumer-facing apps are only beginning to build.
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