CFTC Gives Crypto Developers Trading Tool Green Light Without Broker Registration

The Commodity Futures Trading Commission (CFTC) has issued a no-action position for Passive Software Providers (PSPs) that build trading tools for derivative products. According to the CFTC, it will not pursue enforcement actions against such crypto developers under certain conditions, even if they don't register as brokers.

The move comes just hours after the SEC released an innovation exemption order for tokenized stocks, which grants a five-year exemptive relief to venues offering these products subject to certain conditions. CFTC and SEC Chairs Paul Atkins and Mike Selig have signaled their commitment to providing clarity for the crypto industry despite setbacks.

The CFTC outlined ten conditions under which these crypto developers may not need to register as introducing brokers. These include that users of the PSP's trading tools are direct members or customers of a Commission-regulated derivative exchange, and that the PSP does not engage in advertising or promotions requiring pre-approval by NFA.