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Phantom and Hyperliquid urge CFTC to modernize onchain derivatives rules
The groups asked the CFTC to exempt protocol developers and non-custodial wallet providers from intermediaries-focused requirements and to clarify how regulated derivatives firms can use onchain infrastructure.
Crypto wallet provider Phantom and the Hyperliquid Policy Center have urged the US Commodity Futures Trading Commission (CFTC) to modernize regulations for blockchain-based, or onchain, derivatives.
In a response to a CFTC request for information on rules affecting fintech firms, the groups asked the agency to confirm that blockchain protocol developers do not need to register solely for creating onchain software, and they also requested guidance that prevents non-custodial wallet providers from being treated as introducing brokers.
The letter argues that many existing CFTC requirements were built for custodial intermediaries that hold customer assets and execute trades, while onchain protocols let users transact directly without intermediaries controlling funds or placing orders.
Phantom and the Hyperliquid Policy Center also asked the CFTC to clarify that regulated derivatives exchanges, clearinghouses, and other intermediaries can use onchain infrastructure for functions such as trade execution, clearing, settlement, margining, and recordkeeping, as long as they continue to comply with existing regulations.