Overview
- Phantom Technologies and the Hyperliquid Policy Center filed a joint comment with the CFTC on July 9 asking the agency to modernize rules that now assume custodial intermediaries.
- The letter requests three specific changes: confirm publishing onchain protocol code alone does not trigger registration, create clear pathways for registered exchanges and clearinghouses to use onchain systems for core functions, and codify Phantom’s March 17 no‑action relief into formal guidance.
- Phantom says it is a non‑custodial wallet that does not hold user funds, control private keys, execute trades, or intermediate transactions and views the March no‑action letter as a narrow, temporary recognition of that role.
- The groups argue that current rules push builders offshore and deter institutional use of onchain derivatives, and they say the CFTC can address the mismatch within its existing authority without new legislation.
- If adopted the proposals could let U.S. registered firms move matching, execution, margining, settlement, clearing, and default management onto blockchains but the changes could also prompt legal challenges from traditional market participants already contesting crypto product treatment.