Key Points
- Two blockchain organizations submitted a joint letter requesting the CFTC to separate protocol developers from traditional financial intermediaries.
- The petition emphasizes that creating and releasing protocol software should remain exempt from federal registration obligations.
- Both groups called for comprehensive guidance enabling regulated exchanges to operate through blockchain infrastructure.
- The filing seeks permanent formalization of Phantom’s temporary no-action relief for non-custodial wallet operations.
- Current relief permits Phantom’s wallet to facilitate user connections with registered derivatives platforms without Introducing Broker status.
Hyperliquid Policy Center and Phantom Technologies called on the CFTC to establish clear boundaries between blockchain software creators and conventional financial intermediaries. Their collaborative submission maintains that releasing open-source protocol code should remain outside federal registration mandates. The organizations additionally pressed for definitive standards regarding how licensed firms may integrate blockchain technology.
Organizations Press for Developer Exemptions
Both entities delivered their formal comment letter on July 9, responding to the commission’s technology evaluation initiative. The CFTC launched its Request for Information on June 18 to collect stakeholder perspectives. The submission arrived within the designated timeframe and outlined three distinct regulatory proposals.
The initial proposal addresses software engineers who build and deploy code for blockchain-based financial systems. The organizations contend this work should fall outside the scope of exchange, broker, or similar registration categories. Their framework distinguishes between writing software and activities like market operation, fund custody, or transaction execution.
The submission further highlighted that traditional software developers working on offchain platforms face no such intermediary classifications. Accordingly, the groups requested the CFTC to maintain consistency by extending this treatment to blockchain-based development. They stressed that a protocol’s financial capabilities alone should not dictate the regulatory classification of its creators.
Proposal Covers Blockchain Integration for Regulated Firms
The second proposal requests comprehensive guidance for licensed exchanges and intermediaries utilizing blockchain technology. Current regulatory frameworks may lack specific direction on how registered entities can fulfill approved functions via decentralized networks. The petitioners seek the CFTC to define precise parameters for compliant blockchain adoption.
Hyperliquid maintains a Layer-1 blockchain platform built specifically for derivatives trading and related financial operations. The network enables native onchain settlement, supported by its HYPE token with a fixed one billion unit supply. The Hyperliquid Policy Center launched in early 2026 with a mission to shape regulatory approaches for blockchain-based markets.
The document emphasized that blockchain architecture delivers transparent settlement mechanisms and reduces dependence on custodial third parties. Direct peer-to-peer transactions can diminish hazards linked to centralized asset management. Explicit CFTC direction would enable licensed entities to evaluate these technologies within existing compliance frameworks.
Wallet Provider Requests Formalized Standards
The third proposal pertains to no-action relief Phantom obtained via Letter No. 26-09 issued on March 17. This relief authorized the wallet to enable user access to registered derivatives exchanges. The determination also confirmed that Phantom fell outside CFTC Introducing Broker registration requirements.
Phantom delivers non-custodial wallet technology and maintains no control over user assets. The platform additionally refrains from trade execution or market administration for services available through its interface. The CFTC relief acknowledged fundamental distinctions between offering software connectivity and conducting regulated intermediary functions.
The collaborative submission urged the commission to transform this individual relief into comprehensive, permanent guidance. Such standards would clarify how non-custodial platforms may facilitate user connections to registered derivatives venues. The CFTC now possesses industry recommendations spanning developers, licensed operators, and wallet providers as it continues evaluating financial technology regulations.
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