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 letter to the @CFTC on July 9, ahead of the regulator's deadline for industry responses to its request for information on financial innovation. The two argue that onchain software and self-custodial wallets are tools, not the intermediaries that existing derivatives rules were written to govern.

The filing responds to the CFTC's request for information on how its rules affect financial innovation, with the groups noting that existing rules were built for legacy markets that rely on brokers, exchanges, and clearinghouses, while onchain markets work through self-custody and code-based settlement.

Three Concrete Asks

The submission puts three specific requests to the Commission. The groups recommended that publishing protocol software should not require registration, that CFTC registrants should have a clear path to use onchain infrastructure, and that the Phantom no-action relief should be made into a formal rule. On the second point, they argued that registered exchanges and clearinghouses should be allowed to use blockchain infrastructure for trading and clearing, and that regulated firms could modernize old systems while keeping core compliance duties.

The groups also asked the CFTC to confirm that non-custodial front-end providers such as Phantom should not be treated as introducing brokers, and want the agency's existing no-action approach turned into a broader rule.

Background: Phantom's No-Action Letter and CFTC Momentum

Phantom, a developer of self-custodial crypto wallets particularly popular in the Solana ecosystem, secured a no-action letter from the CFTC in March 2026, allowing it to offer users access to certain regulated derivatives markets without registering as a broker. Phantom called the relief "first-of-its-kind," enabling in-app access to regulated derivatives and event contracts while signaling a potential regulatory template for other crypto wallet providers.

CFTC Chair Michael Selig has said the agency wants to turn its March no-action position for Phantom into formal rules, with Selig indicating the agency prefers rulemaking over one-off staff relief. The joint filing from @HyperliquidPC and @phantom is designed to push that process forward.

The CFTC will weigh industry responses before deciding whether to issue guidance or begin rulemaking, a decision that could determine how much onchain activity moves onshore.

Sources:
BeInCrypto: Hyperliquid and Phantom Urge CFTC to Exempt DeFi From Legacy Rules
CoinDesk: Phantom Wins CFTC No-Action Relief
Crypto News: CFTC May Lock In Phantom-Style Crypto Wallet Protections