The US Commodity Futures Trading Commission (CFTC) is preparing to advance formal rulemaking aimed at providing definitive guidance on when developers of non-custodial software, such as self-custodial wallets and trading interfaces, must register as brokers or associated persons. This development was highlighted by CFTC Chairman Michael Selig, reflecting the agency’s intent to transition from temporary staff relief to enduring regulatory clarity for technology innovators in the derivatives space.
This initiative tackles ongoing ambiguity in how the Commodity Exchange Act applies to modern digital tools.
Traditional registration requirements for introducing brokers typically apply to entities that solicit orders, accept customer funds, or receive transaction-based compensation in connection with futures, swaps, or other commodity-based transactions.
Many builders of decentralized finance applications and wallet software have navigated uncertainty, concerned that user-friendly features could inadvertently trigger these obligations and associated compliance burdens.
In March 2026, the CFTC’s Market Participants Division issued a notable no-action letter to Phantom Technologies, the team behind the widely used self-custodial Phantom wallet.
The letter confirmed that the Division would not recommend enforcement for failure to register as an introducing broker or associated person, as long as the software adhered to specific limitations.
Key conditions include avoiding custody of customer assets, not acting as a counterparty, refraining from order solicitation or guarantees of execution, and restricting compensation to non-transaction-based models.
The software must also route users exclusively to properly registered intermediaries like futures commission merchants or designated contract markets.
Chairman Selig recently indicated at the Consensus Miami conference that the agency seeks to embed this framework into formal rules in the near term.
He described the approach as progressing deliberately from initial guidance to comprehensive protections that are more resilient and broadly applicable.
This shift would reduce reliance on individualized no-action requests, offering greater predictability for US-based developers and encouraging domestic innovation in blockchain infrastructure.
The planned rulemaking complements the CFTC’s broader Project Crypto efforts, which include coordination with the Securities and Exchange Commission on asset classifications and other measures to modernize oversight.
By distinguishing passive software tools from traditional intermediaries, regulators aim to support technological advancement while maintaining safeguards for market participants and integrity.
Stakeholders in the crypto sector largely welcome the move, viewing it as a step toward lower barriers for product development and investment.
Formal rules would undergo a standard notice-and-comment process, allowing industry input to shape the final outcome. Potential challenges include defining precise boundaries for compliance and ensuring rules keep pace with evolving technology.
This regulatory trajectory underscores the CFTC’s commitment to fostering a competitive environment for American innovation in digital assets. By codifying protections for non-custodial developers, the agency could help position the United States more strongly in the global blockchain / open-source software development ecosystem.