Phantom Secures CFTC Exemption Letter, Enabling First-Ever Direct Connection of Crypto Wallets to Compliant Derivatives Markets
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Phantom Secures CFTC Exemption Letter, Enabling First-Ever Direct Connection of Crypto Wallets to Compliant Derivatives Markets
Phantom can now serve as a non-custodial interface that connects users to registered exchanges without assuming the regulatory obligations associated with introducing brokers.
Navigating Web3 tides with focused insightsAuthor: Phantom
Translated and compiled by TechFlow
TechFlow Intro: Phantom has obtained a landmark no-action letter from the U.S. Commodity Futures Trading Commission (CFTC), confirming that crypto wallets need not register as “introducing brokers” to directly connect users with compliant derivatives and event-based contract exchanges.
This is the first instance globally of such a model—and Phantom’s approach itself is noteworthy:
Proactively engaging regulators and prioritizing compliance before launch—not building first and seeking forgiveness later—may set a new precedent for how the crypto industry interacts with regulatory agencies.
Full text below:
We are pleased to announce that the CFTC has issued a no-action relief letter confirming that Phantom, in collaboration with its CFTC-registered partners, may provide users direct access to regulated markets within the Phantom application without registering as an introducing broker.
This marks a significant milestone—and one we proudly achieved in partnership with the CFTC.
Contents of the No-Action Letter
As a software provider, Phantom may now serve as a non-custodial interface connecting users to registered exchanges (e.g., designated contract markets, or DCMs) without assuming the regulatory obligations of an introducing broker.
The letter includes several conditions designed to uphold the CFTC’s policy priorities while safeguarding user interests.
Under this model, users submit orders directly to registered exchanges; Phantom never touches customer funds. This arrangement applies specifically to custodial arrangements with registered exchange partners and does not extend to DeFi derivatives or tokenized prediction markets.
Our Approach
The entire process leading to Phantom’s receipt of this no-action letter reflects how regulatory engagement should ideally function.
We thank the CFTC for its openness in supporting innovation. We proactively engaged with the CFTC to seek clear guidance on how Phantom—without registering as an intermediary—could offer users access to regulated markets via a non-custodial interface working alongside registered partners.
Rather than adopting a “build first, ask for forgiveness later” approach, we chose a different path: delivering safe, reliable access to traditional financial markets for users. This letter is the tangible outcome of that commitment.
Significance Beyond Phantom
This is the first global no-action letter for this specific model. The CFTC’s letter acknowledges that it is actively developing rules or guidance that may eventually supersede this letter—and we hope our involvement helps shape a durable, industry-wide framework.
We also extend our sincere thanks to the CFTC for its thoughtful, good-faith collaboration. Addressing truly groundbreaking legal questions demands effort from both sides—and this outcome demonstrates that both parties were willing to do the work, rather than defaulting to denial.
Phantom was founded on the belief that crypto should be safe and easy to use. We remain committed to leading the development of innovative, compliant, and user-first products.
“The key to making crypto safe and easy to use lies in building financial products governed by clear, reasonable regulation. Engaging regulators early—and proactively seeking compliant pathways—delivers better outcomes for users, the industry, and regulators themselves. This letter proves it.
We thank the CFTC for partnering with us on this genuinely groundbreaking issue—and look forward to launching more innovative products for consumers in ways that inspire confidence and establish the right precedents.”
—Brandon Millman, CEO
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