Hyperliquid Policy Center and Phantom Ask CFTC to Codify Relief for Non-Custodial Crypto Developers

The Hyperliquid Policy Center (HPC) and Phantom, a leading self-custodial wallet provider, have jointly submitted a comment letter to the U.S. Commodity Futures Trading Commission (CFTC) urging the agency to draw a clear regulatory line between infrastructure developers and financial service providers in on-chain rules. According to BitcoinWorld, the groups argue that conflating the two roles risks stifling innovation in blockchain technology.

BitcoinWorldHPC and Phantom Push CFTC to Draw Clear Line Between Developers and Financial Firms in On-Chain Rules

The letter responds to the CFTC's request for information on fintech regulations and builds on the agency's March no-action relief for Phantom. Phantom's own announcement stated that the letter asks the Commission to "codify that relief for all non-custodial interfaces and confirm that building onchain protocol software doesn't require broker registration." "codify that relief for all non-custodial interfaces and confirm that building onchain protocol software doesn't require broker registration." :: Phantom (phantom.com)

phantom.comPhantom and Hyperliquid Policy Center Urge CFTC to Codify Non-Custodial Interface Relief in Fintech RFI Response

BitRss reported that the organizations urged the CFTC to clarify rules for onchain protocols, wallet providers, and regulated derivatives markets. The push comes as regulators worldwide grapple with how to apply traditional financial frameworks to decentralized technologies.

BitRssPhantom and Hyperliquid Policy Center urge CFTC to clarify onchain market rules

En.bloomingbit.io noted that HPC and Phantom specifically asked the CFTC to distinguish developers from financial service providers in on-chain rules. The request reflects a broader industry concern that vague regulations could inadvertently treat software engineers like brokers, imposing compliance burdens that are ill-suited to code repositories and non-custodial interfaces.

en.bloomingbit.ioHPC, Phantom Urge CFTC to Distinguish Developers From Financial Service Providers in On-Chain Rules

By asking for a codified safe harbor for non-custodial tools, the letter seeks to give the blockchain sector more certainty while preserving the CFTC's oversight of actual financial intermediaries. The outcome of this rulemaking could set a precedent for how U.S. agencies regulate the line between software development and financial services.