US Regulators Ease Burdens for Passive Trading Software Providers
The US Commodity Futures Trading Commission (CFTC) has taken steps to ease regulatory burdens for providers of passive trading software. The agency issued a no-action position on Thursday, stating it would not recommend enforcement against qualifying providers that connect users to regulated derivatives firms and exchanges.
To qualify, these providers must meet certain conditions, including restrictions on exercising discretion over users' orders. This move could make it easier for crypto wallets and other apps to offer access to regulated derivatives without becoming CFTC-regulated introducing brokers themselves.
The action extends a similar position granted to Phantom Technologies in March for its self-custodial crypto wallet software. Phantom and the Hyperliquid Policy Center also pushed for broader protections in July, asking the CFTC to shield non-custodial wallet providers from introducing broker requirements and clarify how existing rules apply to blockchain developers and regulated derivatives firms using onchain infrastructure.