Phantom Seeks CFTC Clarity on Derivatives Access Ahead of July Deadline

Phantom, a software provider for non-custodial wallets, has filed a letter with the US Commodity Futures Trading Commission (CFTC) to clarify its role in providing access to regulated derivatives markets. The company seeks to avoid being classified as an introducing broker and to create a clear path for registered exchanges and clearinghouses to perform functions on public blockchains.

The filing, submitted ahead of the July 9 deadline, includes three specific requests: protocol developers should not be required to register simply for building on-chain software, registered exchanges and clearinghouses should have a clear route to execute functions like execution, margining, and recordkeeping on public blockchains, and non-custodial wallets should avoid being classified as introducing brokers when providing technical access to markets.

The CFTC had previously issued no-action relief to Phantom in March, stating that staff would not recommend enforcement if the company failed to register as an introducing broker for a specific kind of software access to registered futures commission merchants. However, this relief applies only to the Market Participants Division and is not binding.