CFTC Urged to Modernize Rules for Onchain Derivatives Amid Innovation Hurdles

Phantom and Hyperliquid Policy Center have asked the US Commodity Futures Trading Commission (CFTC) to modernize rules for onchain derivatives. They submitted a letter in response to a CFTC request for information on regulations affecting fintech firms.

The companies argue that existing CFTC regulations were designed for custodial financial intermediaries, while onchain protocols allow users to transact directly without intermediaries controlling funds or executing orders.

They asked the agency to confirm that blockchain protocol developers do not have to register solely for creating onchain software and to clarify that registered derivatives exchanges can use onchain infrastructure for trade execution, clearing, settlement, margining, and recordkeeping.