TLDR
- Phantom secured a no-action letter from the U.S. Commodity Futures Trading Commission for certain trading features.
- The CFTC said it will not recommend enforcement if Phantom meets specific conditions.
- The relief allows Phantom to connect users with registered futures commission merchants and exchanges.
- Phantom confirmed that it does not custody customer funds or intermediate trades.
- Users will submit orders directly to CFTC-registered entities through the Phantom interface.
Phantom has secured no-action relief from the U.S. Commodity Futures Trading Commission to support trading access through registered brokers. The decision allows Phantom to operate certain software features without broker registration if it meets strict conditions. The relief covers its non-custodial interface that connects users directly with CFTC-registered entities.
Phantom Receives CFTC No-Action Letter for Derivatives Access
The CFTC’s Market Participants Division issued the no-action letter on Tuesday. The division said it will not recommend enforcement if Phantom meets specific requirements. The relief applies to software that routes orders to registered futures commission merchants and designated contract markets.
Phantom can integrate access to regulated derivatives and event contracts through approved partners. However, users must submit orders directly to registered exchanges. The agency clarified that Phantom cannot custody customer funds or intermediate trades.
Phantom Technologies Inc., which operates Phantom Wallet, requested the relief. The company stated that it engaged regulators before launching these features. As a result, the CFTC reviewed how non-custodial interfaces fit existing introducing broker rules.
The division confirmed that Phantom’s software must remain a direct interface. It cannot solicit trades outside the approved framework. It also must ensure that all transactions pass through registered entities.
The CFTC stated that it will not pursue enforcement for covered activities. However, Phantom must comply with the outlined conditions. The letter applies only to specific trading-related functions described in the request.
Phantom Expands App Features Through Registered Partners
Phantom said the letter enables new integrations inside its wallet application. The company plans to provide access to regulated derivatives markets within the app. Users will connect with futures commission merchants and designated contract markets.
The company emphasized that it does not custody digital assets for these trades. It also does not hold or transfer customer funds. Instead, the software connects users directly to registered brokers.
Phantom described the outcome as “first-of-its-kind” for its operating model. The team wrote that it chose to engage regulators early. “Rather than building first and seeking forgiveness later, we took a different approach,” the company stated.
Chief Executive Officer Brandon Millman commented on the process. He said, “A critical part of making crypto safe and easy to use is building financial products governed by clear regulations.” He added that early dialogue with the CFTC clarified how non-custodial interfaces can operate under current rules.
Millman also expressed appreciation for the regulator’s engagement. “We’re grateful to the CFTC for working through a genuinely novel question with us,” he said. He added that the company looks forward to bringing more products to consumers under compliant structures.
