CFTC Eases Regulations on Passive Trading Software for Crypto Derivatives

The U.S. Commodity Futures Trading Commission (CFTC) has expanded regulatory relief for developers of passive trading software, potentially making it easier for users to access regulated derivatives through wallets and other interfaces.

The Market Participants Division said on September 17 that it would not recommend enforcement action over introducing-broker registration, subject to specified conditions. This builds on Staff Letter 26-09, which was issued in March for Phantom Technologies, covering self-custodial wallet software that could provide users access to CFTC-regulated derivatives.

The new position makes similar relief broadly available to qualifying passive software providers instead of limiting it to the original beneficiary. The CFTC's framework specifically covers software that can display market data, provide information about derivatives products and allow users to submit orders to registered entities.