Phantom, Hyperliquid ask CFTC to modernize rules for onchain derivatives

The companies urged the regulator to exempt blockchain developers and non-custodial wallet providers from rules designed for traditional financial intermediaries.

Crypto wallet provider Phantom and the Hyperliquid Policy Center have urged the US Commodity Futures Trading Commission (CFTC) to exempt blockchain protocol developers and non-custodial wallet providers from regulations designed for traditional financial intermediaries.

In response to a CFTC request for information on regulations affecting fintech firms, the companies asked the agency to confirm that blockchain protocol developers do not have to register solely for creating onchain software, issue guidance allowing regulated derivatives firms to use blockchain infrastructure, and codify exemptions preventing non-custodial wallet providers from being treated as introducing brokers.

The companies argued that existing CFTC regulations were designed for custodial financial intermediaries that hold customer assets and process trades, while onchain protocols allow users to transact directly without intermediaries controlling funds or executing orders.

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