The Commodity Futures Trading Commission (CFTC) has expanded regulatory relief for passive software providers that facilitate connections between users and regulated derivatives firms and exchanges.
In a no-action position issued Thursday, the CFTC's Market Participants Division stated it would not recommend enforcement against qualifying providers or their personnel for failing to register as introducing brokers or associated persons when facilitating trading with CFTC-registered firms and exchanges.
To qualify for the relief, providers must meet conditions that limit their role in transactions, including restrictions on exercising discretion over users' orders. The expansion extends a similar position granted to Phantom Technologies in March for its self-custodial crypto wallet software, which allowed the company to provide and market software connecting users with registered futures brokers and exchanges without registering as an introducing broker.
The relief could make it easier for crypto wallets and other applications to offer access to regulated derivatives, including perpetual contracts and prediction markets, without becoming CFTC-regulated introducing brokers themselves.
Regulatory Action Follows Legislative Setback
The CFTC's move came two days after the CLARITY Act failed to advance in the Senate, with a cloture motion receiving 49 votes, falling short of the 60 needed to proceed to debate.
Following the vote, CFTC Chair Michael Selig and Securities and Exchange Commission Chair Paul Atkins indicated Wednesday that their agencies would continue moving forward on crypto regulation under their existing authority. Selig stated that the CFTC is ready to advance its rules, while Atkins said the SEC would act with or without legislation to provide regulatory certainty for digital assets.
On Thursday, alongside the CFTC's no-action position, the SEC approved a temporary exemption allowing qualifying platforms to facilitate limited onchain trading of tokenized US stocks through permissioned automated market makers and liquidity pools.
