Building a wallet interface that lets people trade futures shouldn't require the wallet maker to become a registered broker — that's the position the Commodity Futures Trading Commission's Market Participants Division staked out this week, and it changes the calculus for a category of crypto software that has mostly operated in a gray area until now.
The division said, in a no-action position released Wednesday, that it won't recommend enforcement against providers of "passive software" for failing to register as introducing brokers, or their staff for failing to register as associated persons, so long as the software only lets users view market data, browse products, and route orders directly to a registered futures commission merchant, introducing broker, or designated contract market. The provider can package that interface inside a self-custodial wallet. What it can't do is exercise discretion over how an order gets routed or executed, generate its own buy or sell signals, or ever take custody of a user's assets — cross any of those lines and the relief doesn't apply.
This isn't the CFTC's first pass at the question. The division granted similar relief to Phantom Technologies back in March under a narrower letter that applied only to Phantom by name. Wednesday's position, issued as Staff Letter 26-25, takes that same template and opens it up to any passive software provider that meets the stated conditions — a meaningful shift from a one-off carve-out for a single company to a standing category other wallets and trading-app builders can now rely on without petitioning the agency individually.
The distinction the CFTC is drawing matters more than it might sound. A brokerage has to register, hold capital, and take on compliance obligations that make sense for a firm actually handling client orders and funds. A wallet that just renders a trading interface and forwards a signed transaction to a market that's already registered isn't performing that function — it's closer to a browser than a broker, in the CFTC's framing. That said, the line is narrower than it might first appear: any hint of the software steering order flow, offering trading advice, or holding user funds would push a provider back across into territory that likely does need registration.
Related: CFTC Calls CME's Kalshi Bitcoin Perpetuals Lawsuit 'Much Ado About Nothing'
The timing put this letter in the shadow of a much bigger regulatory story the same day — the SEC's own Innovation Exemption for tokenized stock trading — but the two moves rhyme. Both agencies are trying to draw a workable line between infrastructure that merely connects users to regulated markets and infrastructure that behaves like the regulated market itself, without waiting for Congress to write new statute. That gap has been visible in the derivatives space specifically: US traders can already trade Bitcoin perpetuals on registered exchanges, but onchain perpetual platforms have remained in a legal limbo the CFTC hasn't fully resolved, and this week's letter chips at the edge of that problem from the software side rather than the exchange side.
It also arrives against a backdrop of the CFTC actively defending its authority over crypto derivatives on other fronts — the agency has separately told a federal court that CME's lawsuit challenging Kalshi's Bitcoin perpetual futures is "much ado about nothing." Taken together, the picture is a commission trying to clear regulatory brush around crypto trading infrastructure piece by piece — passive software here, exchange jurisdiction there — rather than in one comprehensive rulemaking.
FAQ
Does this mean any crypto wallet can now offer derivatives trading?
No. The relief only covers software that passively routes orders to already-registered futures commission merchants, brokers, or exchanges. A wallet that gives trading signals, chooses how to execute orders, or holds user funds falls outside the no-action position and would still need to consider registration.
Is this the same as the SEC's tokenized-stock exemption announced the same week?
No, they're separate actions from separate agencies covering different markets — this CFTC letter is about derivatives software, while the SEC's Innovation Exemption covers tokenized equity trading venues. Both reflect regulators using narrow, conditional relief instead of waiting on new legislation.
What happens to companies that relied on the earlier Phantom-specific letter?
Phantom's March relief still stands, but Wednesday's broader position means other passive software providers no longer need their own individual no-action letter — they can rely on the general position as long as they meet the same conditions.
