CFTC Expands Crypto Trading with New Software Provider Rules

The Commodity Futures Trading Commission (CFTC) has issued new guidance to expand cryptocurrency and prediction market trading through online platforms. The CFTC exempted certain software providers from registration requirements, provided they never take custody of user assets.

This move is a significant step for the industry, as it allows companies like Phantom Technologies Inc. to offer prediction markets to its more than 20 million crypto wallet holders without registering as brokers.

Phantom's CEO, Brandon Millman, said that this business model establishes the foundation for platforms that do not take custody of user assets or make trading decisions.

The new guidance follows a no-action letter granted to Phantom in March and has been adopted by other companies like Crypto.com and ProphetX. This could potentially allow prediction markets to be placed nearly anywhere, as Aaron Brogan, founder of Brogan Law, pointed out.