Phantom Technologies and the Hyperliquid Policy Center filed a joint comment letter with the Commodity Futures Trading Commission on July 9, asking the agency to carve out blockchain developers and non-custodial wallet providers from registration requirements built for a very different era of finance.

The core argument is straightforward: writing code is not the same as running an exchange. And a wallet that lets users access derivatives without ever holding their funds shouldn’t be regulated like a broker.

What they’re actually asking for

The letter lays out three specific recommendations, each targeting a different pressure point in the current regulatory framework.

First, Phantom and the Hyperliquid Policy Center want the CFTC to confirm that publishing onchain software does not, by itself, trigger any registration requirement. In English: if you build a smart contract and deploy it, that act alone shouldn’t force you to register as a Designated Contract Market, a clearinghouse, or a Futures Commission Merchant.

Second, the letter urges the CFTC to let entities that are already registered, like DCMs and FCMs, use onchain technology for core functions such as matching, settlement, and margining. This is the bridge proposal. It would let traditional players adopt blockchain infrastructure without stepping into a regulatory gray zone.

Third, and perhaps most strategically, the organizations want the CFTC to codify the no-action relief it previously granted to Phantom. On March 17, 2026, the CFTC issued a no-action letter that allowed Phantom’s wallet to facilitate user access to regulated derivatives without requiring broker registration. That letter was a lifeline, but no-action relief is inherently temporary and revocable. Phantom wants it made permanent.

The timing here matters. The CFTC issued a Request for Information on fintech regulations from June 16 to 18, following Executive Order 14405. The deadline for public comments was July 9, the same day Phantom and Hyperliquid filed their letter.

Why these two companies, and why now

Phantom is a Solana-native wallet with approximately 15 million monthly active users. It’s the front door through which millions of people interact with decentralized applications, including derivatives platforms. Phantom doesn’t custody assets. It doesn’t execute trades on behalf of users. But under current rules, its role facilitating access to derivatives could theoretically require broker registration.

Hyperliquid, on the other hand, is one of the leading onchain perpetual contract platforms. Hyperliquid’s policy arm has a direct interest in making sure the infrastructure that supports its market, from wallets to settlement layers, isn’t strangled by rules designed for floor traders at the Chicago Mercantile Exchange.

Together, they represent both the access layer and the execution layer of onchain derivatives. If regulators treat either one like a traditional intermediary, the whole stack becomes unworkable for US-based firms.

The March no-action letter to Phantom was a significant signal. It suggested the agency understands that not every participant in a derivatives transaction is an intermediary in the traditional sense. But signals aren’t rules, and no-action relief is inherently temporary and revocable.

What this means for investors and the market

If these recommendations are adopted, even partially, US-registered firms could begin integrating onchain infrastructure for derivatives trading, clearing, and settlement. Right now, most institutional players in the US either avoid onchain derivatives entirely or access them through offshore structures that add cost, complexity, and counterparty risk.

One of the letter’s central arguments is that treating software publication as a regulated activity pushes builders offshore. If a developer deploys a perpetuals protocol and immediately faces the prospect of registering as a DCM, the rational move is to relocate to a friendlier jurisdiction. Codifying exemptions for non-custodial tools could keep more of the ecosystem onshore, which is ultimately what the executive order behind the CFTC’s RFI was aiming for.

The most telling detail in the entire filing might be the smallest one: Phantom and Hyperliquid aren’t asking to be left alone. They’re asking to be regulated, just differently. That distinction, between wanting no rules and wanting the right rules, is where the real policy conversation lives.