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Points of Focus
- The CFTC broadened no-action relief from Phantom alone to all similar software providers.
- Providers can now embed CFTC-regulated derivatives trading inside crypto wallets.
- The move follows Selig’s pledge to act after the CLARITY Act’s Senate defeat.
The Commodity Futures Trading Commission’s (CFTC) Market Participants Division (MPD) issued a staff letter on Sept. 17 broadening no-action relief that previously applied only to crypto wallet provider Phantom Technologies, extending it to any similarly situated software provider that wants to offer trading access to CFTC-regulated derivatives without registering as an introducing broker. The relief, Staff Letter 26-25, covers what the CFTC calls passive software providers (PSPs).
.@CFTC Staff Issues No-Action Position to Providers of Passive Software: https://t.co/irgUh9JejX
— CFTC (@CFTC) September 17, 2026
The MPD said it had received inquiries from multiple providers seeking the same treatment after Phantom received its bespoke letter in March and concluded a broader position “on substantially the same terms” was warranted rather than issuing repeated one-off letters.
What a PSP can and cannot do
The letter permits covered providers to build front-end interface software letting users view market data, review product offerings, and submit orders to registered futures commission merchants (FCMs), introducing brokers, or designated contract markets (DCMs) for products including event contracts and perpetual contracts. That software can be offered as a standalone product or embedded inside an existing wallet, and the letter’s language explicitly addresses exactly the kind of integration Phantom pursued.
A PSP cannot take custody of user funds, generate express buy or sell signals, or exercise discretion over how an order gets routed or executed. Users must be onboarded as direct customers of the underlying broker or exchange, retaining the ability to access that broker or exchange independently of the PSP’s software.
Providers must also give users risk disclosures and conflict-of-interest information, maintain compliance policies as if they were a registered introducing broker, and sign an undertaking accepting joint and several liability alongside the FCM, IB, or DCM they connect to, and file it with the MPD.
The letter lists 10 separate conditions, including that the provider and its principals not be subject to statutory disqualification, that records be kept consistent with standard commission recordkeeping rules, and that the MPD be notified if the provider becomes insolvent or enters bankruptcy. None of these conditions is satisfied merely by declaring compliance; a PSP must file a notice with the division agreeing to the terms and consenting to CFTC jurisdiction before relying on the position.
Why the CFTC’s crypto wallet exemption follows the CLARITY Act’s defeat
The timing tracks a pattern already visible elsewhere in Washington this week.
CFTC Chair Michael Selig said the agency was “ready to ship” crypto rules using its existing statutory authority after the Senate’s CLARITY Act cloture vote failed 49-50 on Sept. 15. This staff letter is a concrete instance of that promise, issued within 48 hours of Selig’s public statement.
— Mike Selig (@ChairmanSelig) September 16, 2026
It is also the second such example this week: The SEC issued an Innovation Exemption for tokenized stock trading venues on Sept. 17, following a similar public commitment from Chair Paul Atkins after the same Senate vote.
🚨 TODAY: The SEC issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues from the definition of “exchange” in the Exchange Act to trade tokenized NMS stock using innovative permissioned automated market makers and liquidity pools. pic.twitter.com/VDi7Oty2d9
— U.S. Securities and Exchange Commission (@SECGov) September 17, 2026
Both agencies are demonstrating, in close succession, that comprehensive legislation stalling in Congress does not leave crypto market structure static; existing exemptive and no-action authority is doing real work in the meantime.
My thanks go to everyone who put so much effort into the CLARITY Act— across the Administration, Congress, investors, and innovators. Our collective conviction that America must continue to lead is indispensable.
I have been unequivocal: with or without legislation, we will act…
— Paul Atkins (@SECPaulSAtkins) September 16, 2026
Why the CFTC exemption is not full self-custodial derivatives trading
The letter’s structure is worth reading carefully rather than assuming it hands self-custodial wallets a green light for fully self-custodial derivatives trading.
The “Covered Activities” section describes a custodial model consistent with existing derivatives market structure: Users must maintain the funds or property securing their positions with a DCM’s clearing organization or a member FCM, not inside the wallet itself. A wallet can serve as the interface a user trades through, but the regulated derivatives positions and collateral sit with a traditional registered custodian throughout.
That distinction matters for understanding this relief. It expands which companies can build a front door to CFTC-regulated derivatives without new registration, not what those derivatives require for where the underlying funds actually live.
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