CFTC Exempts Wallet and Software Developers from Broker Registration

CFTC Expands No-Action Letter for Wallet and Software Developers

The Commodity Futures Trading Commission (CFTC) of the United States has expanded its no-action letter (a policy of refraining from enforcement actions) to exempt passive software providers and wallet developers that connect users to regulated derivative markets from broker registration requirements.

This new interim measure comes amid stalled discussions on the CLARITY bill in the Senate, providing a broader legal framework for developers in the cryptocurrency and prediction markets.

Background and Scope of the Expanded Relief Measures

The no-action letter expands the relief previously granted in March of this year (2026) to Phantom Technologies, a company specializing in cryptocurrency wallets, to all passive software developers that meet the criteria.

In March, Phantom became the first passive software provider to receive no-action relief from the CFTC. We're grateful to the CFTC for working with us to chart a new path for non-custodial software providers to connect people with regulated markets, all while the provider never holds users' funds or makes decisions about their trades.

Now the CFTC has opened that same path to other software providers, and that's a win for the whole industry. This is how it should work: software built to protect consumers, paired with regulated partners, giving more people safe access to the financial services they want 🤝.

--- Brandon Millman (@BChillman) September 17, 2026

The measures apply to passive interfaces and self-managed wallets that connect users to regulated markets such as registered futures commission merchants (FCMs), introducing brokers (IBs), and designated contract markets (DCMs). Patrick Wilson, legal advisor at the Solana Policy Institute, noted that this policy allows developers to have clearer standards for connecting to regulated markets without being overly treated as introducing brokers.

Strict Conditions and Ten Limitations for Exemption

To benefit from this exemption, developers must adhere to strict conditions. The most significant requirement is that the software must be entirely "passive."

• Absence of Discretion:
  Developers cannot execute trades, decide on routing methods, or issue explicit buy/sell signals; users must have complete control over all transactions.

• Prohibition of Custody:
  Developers are not allowed to directly hold users' funds or assets backing derivative positions; funds must be under the management of a clearinghouse.

• Limitations on Fee Structures:
  Receiving variable kickbacks or rewards based on trading volume is generally prohibited.

Additionally, the CFTC staff letter outlines ten detailed activity restrictions and conditions. These include ensuring that principals do not fall under legal disqualification, maintaining records related to risk disclosures, and notifying the CFTC in case of insolvency. It is also essential to maintain an environment where users can access regulated markets directly without going through the software.

Interim Approach and Future Outlook

This decision was made just days after the Senate voted down the CLARITY (Cryptocurrency Market) bill. While calls for legal certainty are increasing, this measure remains a staff-level no-action from the committee and does not legally bind the entire commission or other departments.

CFTC Chairman Michael Selig has indicated a willingness to use existing legal authority to bring clarity to the market, expressing a desire to elevate such interim views into formal rules in the future. On the same day, the SEC (Securities and Exchange Commission) announced an innovation exemption for tokenized stocks, continuing to explore flexible practical responses from various regulatory authorities amid legislative stagnation.