TLDR
- Hyperliquid Policy Center and Phantom urged the CFTC to distinguish onchain developers from traditional financial intermediaries.
- The groups argued that publishing protocol software alone should not trigger federal registration requirements.
- They requested updated guidance allowing regulated exchanges and intermediaries to use onchain infrastructure.
- The letter asked the CFTC to formalize Phantom’s existing no-action relief for non-custodial wallet services.
- Phantom’s relief allows its wallet to connect users with registered derivatives markets without Introducing Broker registration.
Hyperliquid Policy Center and Phantom Technologies urged the CFTC to distinguish onchain software developers from traditional financial intermediaries. Their joint letter argues that publishing protocol code alone should not trigger federal registration requirements. The groups also asked the CFTC to clarify how regulated companies may use blockchain infrastructure.
CFTC Urged to Exempt Protocol Developers
The organizations submitted their comment letter on July 9, responding to the agency’s financial technology review. The CFTC issued its Request for Information on June 18 to gather industry feedback. The filing arrived before the response deadline and presented three regulatory requests.
Hyperliquid and Phantom ask the CFTC to stop treating DeFi like a broker
Hyperliquid's policy arm (@HyperliquidPC) and wallet maker @phantom filed a joint comment to the @CFTC, answering its request for information before today's deadline. Their pitch is that onchain software… pic.twitter.com/695S2SksIM
— BSCN (@BSCNews) July 9, 2026
The first request concerns developers who create and publish software for onchain financial protocols. The groups said this activity should not require registration as an exchange, broker, or other regulated business. Their position separates software creation from operating markets, controlling funds, or executing customer transactions.
The letter also noted that regulators have not traditionally classified offchain software developers as financial intermediaries. Therefore, the organizations asked the CFTC to apply the same principle to blockchain-based code. They argued that a protocol’s financial function should not automatically determine its developer’s regulatory status.
Letter Addresses Regulated Blockchain Use
The second request seeks updated guidance for registered exchanges and intermediaries using onchain infrastructure. Existing rules may not clearly explain how regulated companies can perform approved functions through blockchain networks. The groups want the CFTC to establish specific conditions for compliant use.
Hyperliquid operates a Layer-1 blockchain designed for derivatives and other financial activities. Its network supports direct onchain transactions, while its HYPE token has a maximum supply of one billion. The Hyperliquid Policy Center began operating in early 2026 and focuses on regulatory policy for onchain markets.
The letter said blockchain systems can provide transparent settlement and reduce reliance on custodial intermediaries. Peer-to-peer transactions can also limit risks associated with centralized asset control. Clear CFTC guidance could help registered companies assess these systems under established compliance procedures.
Phantom Seeks Permanent Wallet Guidance
The third request involves no-action relief that Phantom received through Letter No. 26-09 on March 17. That relief allowed its wallet to connect users with registered derivatives markets. It also indicated that Phantom did not require CFTC registration as an Introducing Broker.
Phantom provides non-custodial wallet software and does not hold customer funds. The company also does not execute trades or control the markets accessed through its interface. The CFTC relief recognized differences between providing software access and performing regulated intermediary services.
The joint filing asked the agency to convert that individual relief into broader, lasting guidance. Such guidance would define how non-custodial tools may connect users with registered derivatives platforms. The CFTC now has industry proposals covering developers, regulated entities, and wallet providers as it reviews financial technology rules.
