CFTC Exempts Passive Software Providers from Broker-Registration Requirements

The Commodity Futures Trading Commission (CFTC) issued new guidance on September 17 that could widen online access to cryptocurrency and prediction-market trading by exempting certain software providers from broker-registration requirements.

The agency said passive software providers partnering with regulated entities will not face enforcement penalties for failing to register as brokers, provided they never take custody of a user’s assets.

This guidance carves out companies that simply route orders to regulated partners from those that handle money directly and is the distinction the CFTC is now using to decide who needs a broker license and who doesn’t.