CFTC Opens Broker Relief to All Passive Trading Software

The Market Participants Division of the Commodity Futures Trading Commission on Sept. 17, 2026 issued a no-action letter that extends broker-registration relief to any provider of passive trading software that meets its terms. Staff said the division will not recommend enforcement against such a provider, or its relevant personnel, for failing to register as an introducing broker or an associated person, according to the division's release. The release describes the position, Staff Letter 26-25, as similar to relief granted in Staff Letter 26-09 and now broadly available to qualifying providers.

Until now only one company could rely on that relief. Phantom Technologies, the maker of the Phantom self-custody wallet, won clearance in March to connect users with registered futures brokers and exchanges without registering as an introducing broker, subject to conditions, Cointelegraph wrote. Unchained reported that the division then heard from other similarly situated providers of passive software asking for the same treatment. The new letter answers them, and Decrypt quoted the letter as saying a no-action position for all such providers on substantially the same terms is warranted.

Decrypt wrote that the letter covers software that lets users view market data, product offerings and position information and submit orders for CFTC-regulated derivatives, including event contracts and perpetual contracts, directly to registered entities. Broker registration can bring heavy compliance duties, so the letter gives those builders a way to connect users to registered markets without standing as the intermediary in the trade.

The covered products reach beyond crypto. Under the letter a provider can distribute front-end software that sends user orders straight to a registered exchange, futures commission merchant or introducing broker, and the products in scope include event contracts, perpetual contracts and other Commission-regulated derivatives, the release states. Unchained noted the provider may take a share of the registrant's revenue, charge users a per-transaction fee, market specific venues and embed the software in its own wallet. A wallet that does so must clearly and conspicuously show when a user is trading a regulated product.

The letter calls the setup a custodial model of trading, consistent with existing market structure for exchange-traded derivatives. Users hold margin at the venue's clearinghouse or a clearing member, and the provider at no point holds user assets, generates express buy or sell signals, or exercises discretion over routing, the letter states. Users sign on as the registrant's own members or customers and keep the ability to reach it without going through the app.

Ten conditions come with the relief. Providers must file a notice accepting the terms, give users disclosures about relationships with registered entities, conflicts and fees, and meet duties on marketing policies, recordkeeping and insolvency or bankruptcy notices, according to the letter's terms. Unless the venue already owes users one, the provider must supply a risk disclosure statement before trading begins.

The seventh condition reaches the trading venues themselves. The provider and each registered venue or broker it works with must sign an undertaking making them jointly and severally liable for the provider's violations in the covered activities it conducts with that venue, and consenting to CFTC jurisdiction to investigate and bring enforcement actions against them, the letter provides. Providers must also follow National Futures Association marketing rules as if they were registered.

A provider tied to a state or tribal government must add a waiver of sovereign immunity, limited or otherwise, where one is needed to make that consent enforceable, Unchained added.

The position is the division's alone, not binding on the Commission, and it lasts only until a CFTC rule or guidance on when software developers must register takes effect, the release says. The relief is not limited to crypto software, so a stock-trading app or prediction-market front end that meets the conditions can use it on the same terms.

The timing drew attention across the market. The letter arrived the same day the Securities and Exchange Commission granted a five-year innovation exemption for onchain trading of tokenized stocks, and two days after the Senate blocked the Clarity Act market-structure bill, Decrypt noted. The Senate's cloture motion drew 49 votes against the 60 needed to proceed, Cointelegraph noted. The CFTC letter itself does not mention the bill.

Agency leaders had previewed action under current authority before the vote. CFTC Chair Michael Selig directed staff in August to explore crypto market-structure rules if Congress did not pass the Clarity Act, including rules for crypto exchanges, leveraged trading and onchain finance protocols, while SEC Chair Paul Atkins said in July that his agency was prepared to write crypto rules if the legislation stalled. After the failed vote Selig posted that the CFTC is locked in and ready to ship rules for the new frontier of finance, and Atkins said the SEC would act with or without legislation to give the market clarity, in posts reacting to the Senate vote.

Industry advocates welcomed the move within hours. Digital Chamber CEO Cody Carbone wrote on X that software providers building tools that connect users to registered futures commission merchants and designated contract markets no longer have to register as brokers just for building the interface. He called that the removal of a major regulatory ambiguity that had chilled software innovation in derivatives markets.

Blockchain Association CEO Summer Mersinger said the staff action provides important clarity through a more functional approach to regulation. The approach looks at what a technology provider actually does rather than treating software itself as a traditional financial intermediary, she said. Coinbase Vice Chairman Ryan VanGrack wrote on X that meaningful relief arrived in a matter of hours after years of regulatory standstill, pointing to the SEC exemption alongside the CFTC letter, and added that the tide has officially turned.

The letter follows a direct industry request. Phantom and the Hyperliquid Policy Center pushed in July for broader protections, asking the CFTC to shield non-custodial wallet providers from introducing-broker requirements and clarify how existing rules apply to blockchain developers and regulated derivatives firms using onchain infrastructure, Cointelegraph recalled. The July request named the exact registration question that Staff Letter 26-25 now answers for the whole market.

Providers that want the new relief must file the notice accepting its conditions and meet each of the ten terms before they can rely on it, the release states.