CFTC Expands Relief for Crypto Wallet Apps Connecting Users to Derivatives

The Commodity Futures Trading Commission (CFTC) issued a no-action position on Thursday extending regulatory relief to "passive software" providers that link users to CFTC-registered derivatives firms and exchanges. The Market Participants Division said it would not recommend enforcement against qualifying providers or their personnel for failing to register as introducing brokers, provided they meet conditions limiting their role in transactions, including restrictions on exercising discretion over users' orders. The move builds on a similar letter granted to Phantom Technologies in March for its self-custodial crypto wallet, and could make it easier for wallets and apps to offer access to perpetual contracts and prediction markets without registering as introducing brokers.

The broader protections follow a joint push from Phantom and the Hyperliquid Policy Center in July, which asked the CFTC to shield non-custodial wallet providers from introducing broker requirements and clarify how existing rules apply to blockchain developers and regulated derivatives firms using onchain infrastructure. The relief signals a pragmatic approach from the regulator as it works to bring onchain trading activity within a defined compliance perimeter without forcing every intermediary layer into a full broker registration.

The action comes just two days after the CLARITY Act failed to advance in the Senate, where a cloture motion received 49 votes, falling short of the 60 needed. Following the vote, CFTC Chair Michael Selig posted on X that "the CFTC is locked in and ready to ship its rules for the new frontier of finance," while SEC Chair Paul Atkins said his agency would act "with or without legislation" to provide regulatory certainty for digital assets. Both chairs signaled their agencies would continue advancing crypto rulemaking under existing statutory authority.

On Thursday, regulators began delivering on that pledge. Alongside the CFTC's no-action position, the SEC approved a temporary exemption, marking a coordinated push to provide clarity for digital asset firms navigating overlapping federal oversight. Analysts at Bernstein have already projected "aggressive" rulemaking from both agencies in the wake of the CLARITY Act's failure, suggesting more guidance for wallets, exchanges, and derivatives platforms operating at the intersection of traditional finance and crypto markets.