Hyperliquid, Phantom urge CFTC to clarify on-chain developer and wallet rules

Hyperliquid Policy Center and wallet provider Phantom submitted comments to the CFTC seeking clearer boundaries between software developers, wallet interfaces and regulated financial intermediaries in onchain markets. The filing, responding to the agency’s request for information on rules that may limit fintech partnerships with Commission-regulated infrastructure and intermediaries, argues that existing regulations generally assume a custodial market structure even though onchain markets can let users trade directly while retaining control of their assets. The groups asked the CFTC to confirm that developing or contributing to onchain protocol software does not by itself trigger registration, and said registration should instead apply to firms that handle customer orders or funds or enter into transactions with customers. They also urged the agency to establish a route for registered exchanges, clearing organizations and intermediaries to use onchain systems for regulated functions such as matching, execution, margining, settlement, clearing and default management. The filing further calls on the CFTC to turn its recent Phantom no-action letter into a formal rule, saying broader certainty is needed for wallet and front-end providers whose role is limited to technical access. Phantom said it does not hold user funds, control private keys, execute trades between users or intermediate transactions, while HPC said it is working to support a regulated path for Americans to access onchain markets, including those available on Hyperliquid.