CFTC Expands Regulatory Relief for Passive Trading Software Providers

On September 18, the U.S. Commodity Futures Trading Commission (CFTC) announced an expansion of regulatory relief for providers of "passive trading software." The CFTC's Market Participants Division issued a "no-action" statement allowing eligible software service providers to connect users with regulated derivatives exchanges without having to register as Introducing Brokers or associated persons.

This adjustment primarily benefits non-custodial wallet and application providers such as Phantom and Hyperliquid Policy Center, provided that the software maintains a passive role in trading and does not exercise any discretion over user orders. The decision extends the exemption previously granted to Phantom Technologies and reflects CFTC Chairman Michael Selig's commitment to strengthening crypto oversight through administrative means following the stalling of the CLARITY Act in the Senate.

[TechFlow]