CFTC Widens Crypto Software Exemption Amid Ongoing Tornado Cash Case

The US Commodity Futures Trading Commission (CFTC) has expanded its regulatory relief for software companies that connect users to regulated derivatives markets. The new no-action position, announced on September 17 by the CFTC's Market Participants Division, provides a wider exemption for crypto wallets and other qualifying software providers.

This means that a crypto wallet can now add a section where users view and trade regulated derivatives without registering as an introducing broker. However, this new decision does not offer any direct protection to developers facing criminal allegations like those in the Tornado Cash case.

The ruling advances the discussion on when software developers can be considered financial intermediaries. A company is deemed to be engaging in the business of brokerage when it only provides its customers with access to financial products, without taking in money or getting involved with people's trading activities.