The U.S. Commodity Futures Trading Commission (CFTC) has taken another step toward accommodating blockchain and crypto apps that simply provide technical access to regulated derivatives venues. In a no-action position issued Thursday, the agency said it would not recommend enforcement against qualifying “passive software” providers—or their personnel—for failing to register as introducing brokers or associated persons, so long as the software meets specific conditions.
The move matters for crypto builders because it creates a clearer path for non-custodial wallets and other software applications to connect users to CFTC-registered firms and exchanges offering products such as perpetual contracts and prediction markets, without automatically pulling the software provider into full broker registration.
Key takeaways
- The CFTC’s Thursday no-action position covers providers of “passive software” that connect users to CFTC-registered derivatives firms and exchanges.
- Qualifying providers would not face enforcement for not registering as introducing brokers or associated persons, if they stay within limits on how they handle user orders.
- The guidance builds on a March no-action letter granted to Phantom Technologies for self-custodial wallet software.
- The regulatory action arrives shortly after the CLARITY Act failed to advance in the Senate, signaling agencies intend to keep moving under existing authority.
A narrower role that reduces registration risk
At the core of the CFTC’s relief is a concept regulators often draw around broker-type activity: where the provider’s software and marketing functions do not cross into exercising discretion over trading decisions. According to the CFTC’s no-action position, the Market Participants Division will not recommend enforcement against providers that qualify under the “passive software” framework for facilitating trading with CFTC-registered entities and exchanges.
To qualify, providers must meet conditions designed to limit their involvement in transactions—especially restrictions related to discretion over users’ orders. The practical effect is to distinguish between software that merely routes users to regulated venues versus software that actively decides, manages, or steers trades on the user’s behalf.
This distinction is particularly relevant for crypto wallets and app-layer products that users interact with directly. If an app can demonstrate that it is not effectively operating like a registered intermediary, it may be able to integrate regulated derivatives access while reducing the compliance burden that typically comes with broker registration.
Extending a precedent set by Phantom
The CFTC’s new stance is not happening in a vacuum. Earlier, the agency granted a similar no-action position in March to Phantom Technologies for its self-custodial crypto wallet software. That letter allowed Phantom, subject to certain conditions, to provide and market software that connects users with registered futures brokers and exchanges without requiring Phantom to register as an introducing broker.
By expanding the relief beyond a single wallet vendor, the CFTC appears to be moving from case-by-case comfort toward a more repeatable standard that other developers can evaluate against. For investors and industry participants, this matters because regulatory certainty is often less about whether the rules can be interpreted, and more about whether firms can plan product roadmaps without waiting for the regulator to address each new integration individually.
The earlier Phantom-related effort also did not remain purely theoretical. The Phantom and Hyperliquid Policy Center later urged the CFTC to modernize how the rules apply to onchain infrastructure—arguing that non-custodial wallet providers should receive clearer protections from introducing broker requirements and that the agency should clarify how existing regulations operate when blockchain developers facilitate access to regulated derivatives venues.
While Tuesday’s details are limited to what the no-action position covers, the direction is clear: regulators are acknowledging that the technical layer of trading—software connectivity—can exist without necessarily replicating the role of a traditional broker.
After CLARITY Act setback, agencies continue
The CFTC’s relief comes two days after the CLARITY Act failed to advance in the U.S. Senate. As reported in earlier coverage of the legislative outcome, a cloture motion received 49 votes, falling short of the 60 needed to proceed to debate.
Following that setback, both CFTC Chair Michael Selig and Securities and Exchange Commission Chair Paul Atkins signaled that their agencies would continue regulatory work using existing authority. In posts on X referenced by the reporting, Selig said the CFTC is “ready to ship its rules,” while Atkins said the SEC would act “with or without legislation” to provide regulatory certainty for digital assets.
Thursday’s developments follow through on that posture. Alongside the CFTC no-action position, the SEC approved a temporary exemption allowing qualifying platforms to facilitate limited onchain trading of tokenized U.S. stocks through permissioned automated market makers and liquidity pools. The pairing of actions—CFTC on derivatives access software, SEC on a narrowly defined pathway for tokenized stock trading—suggests regulators are pursuing targeted certainty even as comprehensive legislation stalls.
Still, the scope of this new no-action relief is not blanket. The CFTC’s conditions and discretion limits are key: “passive” software is not a synonym for “anything goes.” Builders will need to ensure their product behavior aligns with the framework, particularly around what the software does (and does not do) with respect to order handling.
What to watch next for wallet and onchain derivatives access
For developers, the most immediate takeaway is to treat the no-action position as a blueprint for compliance planning. Since the CFTC’s relief hinges on meeting specific conditions—especially those related to discretion—teams integrating regulated derivatives access should document how their software operates, what actions are user-driven, and what guardrails prevent the app from effectively acting like a broker.
For users and market participants, the broader question is how quickly regulated-derivatives access becomes more “app-like.” The CFTC is signaling that non-custodial connectivity to CFTC-registered venues can fit within existing regulatory boundaries when structured appropriately. The open issue is how tightly the framework will be interpreted in edge cases, such as more interactive order workflows, automated strategies, or features that could be viewed as steering trades.
Readers should watch whether additional CFTC communications expand “passive software” guidance to more product categories, and how firms demonstrate compliance with the discretion and order-handling limits as onchain interfaces for regulated derivatives continue to evolve.
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