DeFi Walks Into the CFTC's Office and Says "Please Don't Regulate the Code 🧾

The Hyperliquid Policy Center (HPC) and non-custodial wallet provider Phantom have asked the Commodity Futures Trading Commission (CFTC) to stop treating decentralized finance (DeFi) the same as Wall Street intermediaries, filing a joint comment before the agency's July 9 comment deadline. The submission responds to a CFTC request for information (RFI) issued on June 18, which asked the industry to identify legacy rules that hold back financial technology. In their joint statement, HPC and Phantom said, "This is our answer, and it is within the Commission's own authority to act on."

The filing sets out three specific requests. First, the groups want confirmation that publishing onchain protocol software does not by itself require registration as an exchange or clearinghouse. Second, they want registered exchanges and clearinghouses permitted to run regulated functions on onchain systems, which would let them modernize US derivatives rules without shedding compliance duties. Third, they want the March no-action relief granted to Phantom codified into a formal rule, giving other wallet providers comparable certainty.

At the core of the request is the argument that self-custodial wallets never hold customer funds or execute trades and therefore should not be treated as intermediaries. HPC and Phantom said rules designed for on-chain markets would keep developers in the United States rather than pushing activity offshore, and they pointed to faster settlement and reduced counterparty risk as benefits of transparent DeFi markets.

The request lands before a CFTC leadership that has already signaled a more accommodating posture toward digital assets. Chairman Michael Selig took office in December and has since pushed US crypto regulation toward clearer rules, including approval of onshore perpetual futures. The Commission is now weighing industry responses before deciding whether to issue guidance or begin formal rulemaking, a decision that could shape how much onchain activity returns to US jurisdiction.