CFTC Eases Regulations for Passive Trading Software Providers
- The CFTC issued a no-action position allowing qualifying “passive software” providers to connect users with regulated derivatives firms without registering as introducing brokers.
- Providers must limit their roles and cannot exercise discretion over users’ orders to qualify for this relief.
- This decision follows a similar position granted to Phantom Technologies in March, which allowed its self-custodial crypto wallet software to connect users with registered futures brokers.
- The CFTC’s action comes shortly after the CLARITY Act failed in the Senate, with only 49 votes in favor of advancing it.
- Additionally, the SEC approved a temporary exemption for platforms facilitating limited onchain trading of tokenized US stocks through automated market makers.
This regulatory relief is significant as it allows crypto wallets and apps greater access to regulated derivatives markets, potentially enhancing user engagement without the burden of broker registration requirements.
The CFTC’s new position may simplify access for platforms connecting users to derivatives trading, reflecting a proactive approach following legislative setbacks like the CLARITY Act failure. (Source)
