CFTC Clears Passive Crypto Trading Software Providers From Broker Registration

The Commodity Futures Trading Commission (CFTC) has announced that providers of passive crypto trading software will not be subject to enforcement for failing to register as introducing brokers or associated persons. The CFTC's Market Participants Division issued a no-action position, Release 9300-26, stating it will not recommend action against qualifying providers or their personnel.

Qualifying software can route orders, display market data, and provide the plumbing that lets a user interact with regulated exchanges. However, it cannot hold custody of assets, generate buy or sell signals, or make trading decisions on a user's behalf.

The relief is intended to spare software companies the costs of introducing broker registration, which includes capital requirements, compliance obligations, and ongoing reporting duties. This move could make it easier for crypto wallets and apps to offer access to regulated derivatives, including perpetual contracts and prediction markets, without becoming brokers themselves.