CFTC Loosens Rules for Crypto Trading Software Providers

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

This ruling allows companies that partner with regulated entities to offer crypto-related services without registering as brokers. Under previous rules, these companies would have been required to register due to soliciting or accepting trade orders and receiving compensation through fees or commissions.

The CFTC's decision is seen as a significant step towards making prediction markets more accessible. Brandon Millman, CEO of Phantom Technologies Inc., believes that this ruling will give more people safe access to financial services they want. Phantom has partnered with Kalshi to offer predictions trading to its over 20 million crypto wallet holders.

The CFTC stated that the new guidance will remain in effect until an agency rulemaking or other guidance becomes effective. This development follows a bipartisan group of senators' decision to block crypto market legislation sought by the industry, and the CFTC Chairman Michael Selig's commitment to implementing rules for the digital asset industry without legislation.