CFTC Widens Relief for Crypto Software Amid Broader Regulatory Landscape

The US Commodity Futures Trading Commission (CFTC) has expanded its regulatory relief for software companies that connect users to regulated derivatives markets. This decision could help crypto wallets add access to products such as perpetual futures and event contracts without registering as brokers.

The CFTC's Market Participants Division announced the new no-action position on September 17, which expands the earlier Phantom relief granted in March. Other qualifying software companies can now rely on this position without requesting individual permission.

This means that a crypto wallet could add a section where users view and trade regulated derivatives, while the software provider directs customers to a particular registered company and receives a share of trading revenue. The software provider would not be required to register as an introducing broker because it only provides access to trading venues and does not become a trading venue itself.

The CFTC emphasizes that users only trade on CFTC-registered exchanges, with money remaining at regulated companies and not with the software provider. The provider is also restricted from controlling customer assets and deciding on execution or sending buy/sell messages.