CFTC Rolls Out Red Carpet for Crypto Wallets — No Broker License Required 🗝️

The Commodity Futures Trading Commission issued a no-action position Thursday expanding regulatory relief for "passive software" providers that connect users to CFTC-registered derivatives firms and exchanges, clearing a path for crypto wallets and trading apps to offer access to perpetual contracts, prediction markets and other regulated products without registering as introducing brokers. The Market Participants Division said it would not recommend enforcement action against them or their personnel for failing to register as introducing brokers or associated persons, provided they limit their role in transactions and refrain from exercising discretion over users' orders.

The position extends relief first granted to Phantom Technologies in March, when the self-custodial crypto wallet developer received a no-action letter allowing it to provide and market software connecting users with registered futures brokers and exchanges. "The Division believes that a no-action position for all [passive software providers] on substantially the same terms as that provided to the software developer in Letter 26-09 is warranted," the CFTC letter said. Phantom and the Hyperliquid Policy Center urged broader protections in July, asking the agency to shield non-custodial wallet providers from introducing broker requirements and clarify how rules apply to blockchain developers and onchain derivatives infrastructure.

To qualify, providers must meet conditions including user disclosures about relationships with registered entities, conflicts and fees; marketing policies; recordkeeping; insolvency or bankruptcy notices; and a filing agreeing to the letter's terms. The covered software can let users view market data, product offerings and position information, and submit orders for CFTC-regulated derivatives, including event contracts and perpetual contracts, directly to registered entities.

Industry groups welcomed the move. Digital Chamber CEO Cody Carbone wrote on X, "Clarity from the CFTC! Software providers that build tools connecting users to registered FCMs/DCMs no longer have to register as brokers just for building the interface. This removes a major regulatory ambiguity that's chilled software innovation in derivatives markets." Blockchain Association CEO Summer Mersinger said the staff action provides "important clarity," adding that the division is "taking a more functional approach to regulation—one that looks at what a technology provider actually does rather than treating software itself as a traditional financial intermediary."

The CFTC action came two days after the Digital Asset Market Clarity Act failed to advance in the Senate, where a cloture motion received 49 votes, short of the 60 needed to proceed to debate. CFTC Chair Michael Selig said on X, "The CFTC is locked in and ready to ship its rules for the new frontier of finance," while Securities and Exchange Commission Chair Paul Atkins said the SEC would act "with or without legislation" to provide regulatory certainty for digital assets. The SEC on Thursday also unveiled an "Innovation Exemption" allowing qualifying platforms to facilitate limited onchain trading of tokenized U.S. stocks through permissioned automated market makers and liquidity pools.