CFTC Eases Crypto Regulations for Passive Software Providers

The US Commodity Futures Trading Commission (CFTC) has expanded regulatory relief for providers of 'passive software' that connect users to regulated derivatives firms and exchanges.

In a no-action position issued on Thursday, the CFTC's Market Participants Division said 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.

This move could make it easier for crypto wallets and other apps to offer access to regulated derivatives, including perpetual contracts and prediction markets, without becoming CFTC-regulated introducing brokers themselves.

To qualify, providers must meet conditions limiting their role in transactions, including restrictions on exercising discretion over users' orders.