Two of crypto’s extra distinguished names simply informed the CFTC, politely however firmly, that writing code shouldn’t require a federal license.
The Hyperliquid Policy Center and Phantom Applied sciences submitted a joint remark letter to the Commodity Futures Buying and selling Fee on July 9, responding to the company’s Request for Data on fintech rules. The core argument: developers who publish onchain protocol software program shouldn’t be pressured to register as Designated Contract Markets, Futures Fee Retailers, or every other regulated entity just because their code exists.
What they’re truly asking for
The letter lays out three particular requests, and every one targets a special friction level in how present guidelines collide with onchain infrastructure.
First, they need the CFTC to verify that growing and publishing onchain protocol software program, by itself, doesn’t set off registration necessities. In English: when you construct a sensible contract that permits derivatives buying and selling, you shouldn’t be handled the identical as JPMorgan’s futures desk.
Second, they’re asking for up to date steerage that may let CFTC-registered exchanges and intermediaries truly use onchain expertise for his or her regulated capabilities.
Third, the letter asks the CFTC to formalize no-action aid that Phantom already acquired again on March 17, beneath CFTC Letter No. 26-09. That aid established that Phantom’s non-custodial pockets may join customers to registered derivatives markets while not having to register as an Introducing Dealer. They need that precedent codified into lasting steerage fairly than sitting as a one-off letter that would theoretically be rescinded.
The CFTC’s RFI was initially issued on June 18, giving business contributors a window to weigh in. This letter landed forward of the deadline.
Why Phantom and Hyperliquid are those making this argument
Hyperliquid operates a Layer-1 blockchain constructed particularly for derivatives and monetary actions. Its native token, HYPE, has a complete max provide of 1 billion. The Hyperliquid Policy Center was established in early 2026 with the specific objective of advocating for regulatory readability round onchain markets.
Phantom is a non-custodial pockets supplier. It doesn’t maintain consumer funds. It doesn’t execute trades. It’s primarily a window into blockchain exercise, not a participant in it. That distinction issues enormously in regulatory phrases, as a result of the standard framework assumes that anybody connecting customers to monetary markets is, in some capability, a dealer or middleman.
Phantom’s earlier no-action aid from the CFTC signaled that at the least some regulators understood the distinction between a instrument that facilitates entry and an entity that handles cash. The joint letter tries to construct on that precedent earlier than it fades into bureaucratic obscurity.
The larger regulatory image
The CFTC has traditionally not handled the creators of offchain buying and selling software program as regulated entities merely for writing code. What this letter argues is that the identical logic ought to lengthen to onchain developers.
The letter makes the case that onchain programs truly provide benefits over conventional custodial infrastructure. Peer-to-peer buying and selling reduces middleman threat. Settlement transparency improves on the opaque back-office processes of conventional finance. Self-custody eliminates the counterparty threat that comes with handing property to another person.
What this implies for traders
Institutional capital has persistently cited regulatory uncertainty as the first barrier to deeper engagement with onchain derivatives. A CFTC framework that explicitly permits registered entities to function on blockchain infrastructure would take away one of many largest obstacles. The distinction between “technically not unlawful” and “explicitly permitted” is gigantic if you’re a compliance officer at a fund managing billions.
The truth that Phantom already secured no-action aid suggests some inner urge for food for lodging, however codifying that into formal steerage is a special, slower course of solely.
