CFTC Moves to Protect Non-Custodial Crypto Developers with New Rules

The Commodity Futures Trading Commission is preparing to formalize protections for non custodial software developers, signaling a more defined regulatory approach toward crypto innovation. The initiative follows earlier guidance that clarified when developers are not required to register as brokers.

Phantom No-Action Letter Shapes Policy Direction

The shift builds on a no action letter issued in March, where the agency stated it would not pursue enforcement against wallet provider Phantom for failing to register as a broker. The guidance outlined that developers offering self-custodial wallet software, under specific conditions, do not fall broker classification requirements.

Rulemaking to Provide Long-Term Clarity

CFTC Chair Michael Selig said the agency now aims to codify this position into formal rules. The goal is to provide certainty for developers building decentralized tools, allowing them to operate within a clearer compliance framework in the United States.

SEC and CFTC Align on Developer Treatment

The move comes alongside similar efforts by the Securities and Exchange Commission, which recently indicated that interfaces such as DeFi wallets are generally not considered brokers. Together, these steps suggest a coordinated push to clarify regulatory boundaries.

Ongoing Jurisdiction Disputes

Separately, the CFTC reaffirmed its authority over prediction markets, continuing legal action against several states attempting to impose local restrictions, highlighting ongoing tensions between federal and state oversight.