Image Credit: Shutterstock
The Commodity Futures Trading Commission’s Market Participants Division has widened a regulatory path for software providers to connect users with U.S.-regulated derivatives markets without registering as introducing brokers. The Sept. 17 staff position offers qualifying crypto wallets and trading apps conditional no-action relief from introducing-broker registration under the circumstances described in the letter.
Relief Extends Beyond Phantom
CFTC Staff Letter 26-25 makes relief previously granted to Phantom Technologies available to other qualifying “passive software providers.” Phantom received its individual no-action position in March for software that connects users with regulated derivatives markets.
The new position applies on substantially the same terms and is not limited to crypto companies. Providers must remain within the activities specified by the letter and file the required notice with the Market Participants Division.
Apps Can Connect Users to Regulated Derivatives
Qualifying software can display market data, positions and available products while allowing users to submit orders through regulated market infrastructure. The relief can apply to access involving event contracts, perpetual contracts and other derivatives traded through appropriately registered U.S. entities, subject to the letter’s conditions.
The interface can operate as a standalone product or inside existing wallet software. Providers may also market specific derivatives, introduce users to registered firms and charge transaction-based fees under the conditions outlined by staff.
Software Providers Cannot Control Trades
The relief separates software functionality from traditional intermediary activity. A qualifying provider cannot hold customer assets, generate explicit buy or sell signals, or exercise discretion over how orders are routed or executed.
Users must submit trades through the relevant CFTC-registered market infrastructure, while margin or other assets securing positions remain with the applicable clearing organization or futures commission merchant. The software provider therefore serves as an access layer rather than taking custody or controlling execution.
CFTC Sets Conditions for Providers
Providers must give users required risk and conflict disclosures, maintain records and comply with applicable CFTC and National Futures Association communication rules. They must also accept CFTC jurisdiction for investigations and enforcement tied to the covered activities. When Phantom secured the earlier relief, CEO Brandon Millman said:
“A critical part of making crypto safe and easy to use is building financial products that are governed by clear, common-sense regulations.”
No-Action Position Is Not a CFTC Rule
The action does not create a permanent exemption from broker-registration requirements. Staff Letter 26-25 reflects the Market Participants Division’s enforcement position and can be modified, suspended or withdrawn.
The relief is intended to remain in place until the CFTC adopts broader rulemaking or guidance on how introducing-broker requirements apply to software developers. For crypto wallets and trading apps, it provides a conditional route to connect users with regulated U.S. derivatives while registered firms retain the core trading, clearing, and custody functions.
