“The letter states that, subject to certain specified conditions, MPD will not recommend the commission take enforcement action against any such provider or their relevant personnel for failure to register as an introducing broker or associated person of an introducing broker,” the CFTC said in the release. “This applies solely in relation to their provision and marketing of software to facilitate trading by the provider’s users with registered futures commission merchants, introducing brokers and designated contract markets.”
The CFTC said in the release that the position outlined in this staff letter is similar to that provided in a March staff letter and expands that decision to other providers.
When announcing the March staff letter, the CFTC said the MPD had issued a no-action position in response to Phantom Technologies, a developer of self-custodial cryptocurrency asset wallet software that was proposing to provision and market software to facilitate its users’ trading with registered futures commission merchants, introducing brokers and designated contract markets.
Phantom CEO and Co-Founder Brandon Millman said in a Thursday post on social platform X that the March no-action relief from the CFTC helped create a path for non-custodial software providers, who don’t hold users’ funds or make decisions about their trades, to connect people with regulated markets.
We’d love to be your preferred source for news.
Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!
“Now the CFTC has opened that same path to other software providers, and that’s a win for the whole industry,” Millman said of the CFTC’s Thursday no-action position. “This is how it should work: software built to protect consumers, paired with regulated partners, giving more people safe access to the financial services they want.”
Bloomberg reported Thursday that the CFTC’s exemption of some software providers from registration requirements will expand crypto and prediction market trading via online platforms.
The report said the CFTC’s March no-action position on Phantom marked a change from earlier requirements that companies would have to register as brokers if they solicited or accepted trade orders, sent them to futures commission merchants, and earned fees or commissions.
Ryan VanGrack, vice chair at Coinbase, said in a Thursday post on X: “After years of regulatory standstill, we just saw meaningful relief in a matter of hours: [Securities and Exchange Commission] Innovation Exemption and [CFTC] No-Action Relief. The tide has officially turned.”
Add as Preferred Source
