CFTC Issues No-Action Relief, Laying Out Compliance Route for Crypto Wallets and Apps to Link Users to Regulated Derivatives

According to CoinDesk, the U.S. Commodity Futures Trading Commission (CFTC) on Thursday issued a no-action letter that outlines a clearer compliance pathway for crypto wallets and trading applications seeking to connect users to CFTC-regulated derivatives markets. The letter targets so-called "passive software providers"—software that performs limited functions such as displaying market data, product information and position details, and transmitting user orders directly to registered regulated entities. The guidance covers CFTC-regulated derivatives, including event contracts and perpetual contracts. Under the staff position, the CFTC will not recommend enforcement action against software providers that confine themselves to these passive functions, provided they meet a set of conditions. The framework is intended to allow certain wallet developers and trading apps to provide access without operating as intermediaries. By contrast, being treated as an introducing broker typically triggers more extensive registration and compliance obligations. The approach builds on relief granted in March to Phantom Technologies, when Phantom's self-custodial wallet was permitted to provide users access to regulated derivatives markets without broker registration. The latest letter broadens the concept to other qualified providers. The CFTC's Market Participants Division said a similar no-action posture may apply where an entity's business is substantially similar to prior cases. The letter is not a blanket approval. It lists prerequisites that include disclosing the relationship with the registered entity, explaining fees and potential conflicts of interest, adhering to marketing policies, and meeting recordkeeping requirements. Providers must also submit a filing confirming acceptance of the terms. In addition, relevant parties must establish notification procedures tied to bankruptcy or insolvency events. Industry groups generally see the move as additional clarity on regulatory expectations that could ease compliance pressure for software developers involved in derivatives-related products. The CFTC action arrived nearly alongside a U.S. Securities and Exchange Commission (SEC) announcement of an "innovation exemption" for tokenized U.S. stocks. Both developments followed the U.S. Senate's failure to advance the Digital Asset Market Clarity Act, legislation designed to set a federal market-structure framework for digital assets and delineate responsibilities between the CFTC and SEC. With legislative momentum stalled, both agencies have recently indicated they intend to proceed with crypto rulemaking on their own.