The CFTC's Market Participants Division issued a no-action position Monday to Phantom Technologies Inc., the developer of the Phantom self-custodial cryptocurrency wallet, stating it will not recommend enforcement against the company for failing to register as an introducing broker in connection with certain trading-related software features.
The decision marks the first formal CFTC staff relief for a non-custodial wallet provider and arrives one week after CFTC Chairman Michael Selig publicly committed to resolving the registration question for DeFi software developers.
Phantom had requested the position in anticipation of providing software that enables its users to trade with registered futures commission merchants, introducing brokers, and designated contract markets.
Under existing CFTC rules, entities that solicit or facilitate derivatives trading can trigger introducing broker registration requirements - a rule originally written for centralized intermediaries, not software providers.
What the Relief Covers
Staff said it will not recommend enforcement against Phantom or its personnel for failure to register as an introducing broker or as associated persons of such brokers, solely in relation to these software-facilitation activities.
The relief is conditional and limited: it does not extend to activities that independently trigger CFTC registration requirements, and it applies only where underlying trades are executed through properly registered counterparties.
As a self-custodial wallet, Phantom does not hold or control users' assets. The wallet primarily supports the Solana blockchain and has separately sought SEC no-action relief on broker-dealer registration requirements.
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Regulatory Context
The Phantom letter is the first concrete output of Selig's stated agenda. Speaking at the FIA Global Cleared Markets Conference on March 10, the CFTC chair said: "For too long, there has been an open question as to whether software providers trigger the CFTC's registration requirements. We intend to address this question head-on."
The agency has framed software developer safe harbors as a priority under its joint "Project Crypto" initiative with the SEC.
Staff no-action positions carry practical weight but are not legally binding rules. They reflect only the Division's enforcement posture and can be withdrawn or revised as circumstances change.
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