CFTC Grants Developers Broader No-Action Relief

The Commodity Futures Trading Commission issued a no-action position on Thursday. The agency will not recommend enforcement action against software developers under specific conditions. This move removes the requirement for developers to register as introducing brokers.

The decision expands a previous no-action letter issued to the Phantom wallet provider. It applies to developers acting as pipelines to designated contract markets. The policy applies if developers provide required disclosures and adopt specific internal policies.

Scope extends beyond crypto assets

A footnote in the agency document indicates the relief may extend beyond crypto asset related software. Patrick Wilson of the Solana Policy Institute called the change a significant step forward. He noted it converts specific relief into a general framework for providers.

Cody Carbone, CEO of the Digital Chamber, stated the move removes regulatory ambiguity. He argued that this clarity had previously chilled software innovation in derivatives markets. The new stance allows builders to connect users to regulated markets without broker status.

SEC moves on tokenized stocks

The CFTC action followed the release of an SEC innovation exemption. The SEC exemption creates room for the onchain trading of tokenized stocks. Both agencies moved forward after the Senate failed to advance the Clarity Act.

Industry sources sought comprehensive legislation for regulatory permanence. They noted that no-action letters can be undone by a future administration. One source said the framework becomes harder to revoke as more companies adopt it.

Risk of future policy reversal

CFTC Chair Michael Selig previously suggested cementing the Phantom relief into rulemaking. That process has not yet resulted in a final rule. The current no-action position remains subject to change by future commissions.

The Block reported that the CFTC stance provides immediate clarity for developers. The regulatory environment now offers a defined path for connecting users to derivatives. The lack of comprehensive federal legislation leaves these protections dependent on agency discretion.