Phantom Obtains CFTC Exemption: Crypto Wallet Direct Connection to Compliant Derivatives

Author: Phantom

Translation: Deep Tide TechFlow

Link:

Disclaimer: This article is a reprint. Readers can find more information through the original link. If the author has any objections to the reprint, please contact us, and we will make modifications according to the author’s requirements. Reprints are for information sharing only and do not constitute any investment advice or represent Wu Shuo’s views and positions.

Phantom has received a far-reaching exemption letter from the CFTC — crypto wallets do not need to register as “introducing brokers” to directly connect users with compliant derivatives and event contract exchanges.

This is the first case of its kind globally, and Phantom’s approach itself is also noteworthy:

Proactively communicating with regulators, complying first before launching, rather than building first and seeking forgiveness later — this approach could become a new model for the crypto industry to interact with regulators.

Full text below:

We are pleased to announce that the CFTC has confirmed through a no-action relief letter that Phantom, in collaboration with registered CFTC partners, can provide users with direct access to regulated markets within the Phantom app without registering as an introducing broker.

This is an important milestone and a proud achievement of our joint efforts with the CFTC.

Content of the Relief Letter

As a software provider, Phantom can now serve as a non-custodial interface, connecting users to registered exchanges (such as designated contract markets, DCMs) without bearing the regulatory obligations of an introducing broker.

The letter includes several conditions designed to ensure the implementation of CFTC’s policy priorities while protecting user rights.

Under this model, users can submit orders directly to registered exchanges, with Phantom never handling customer funds. This regulation specifically applies to custodial models in partnership with registered exchanges and does not cover DeFi derivatives or tokenized prediction markets.

Our Approach

The entire process that led Phantom to obtain this relief letter exemplifies how regulatory procedures should operate.

Thanks to the CFTC’s willingness to open the door to support innovation, we proactively communicated with the CFTC to seek clear guidance on how to provide users with access to regulated markets through registered partners without registering ourselves as intermediaries.

We chose not to build first and seek forgiveness later, but instead took a different path to offer users a safe and reliable way to access traditional financial markets. This letter is the result of that process.

Significance Beyond Phantom

This is the first exemption of its kind globally. The CFTC acknowledges that they are working on rules or guidelines that could replace this letter in the future. We hope our participation can help shape a lasting framework that benefits the entire industry.

We also thank the CFTC for their serious and honest cooperation. Addressing truly pioneering legal issues requires effort from both sides, and this outcome reflects a mutual willingness to do the work rather than default to rejection.

Phantom was founded on the belief that crypto should be safe and easy to use. We are committed to continuously leading the development of innovative, compliant, and user-centric products.

“The key to making crypto safe and user-friendly is to create financial products governed by clear, reasonable regulations. Engaging with regulators early when necessary and seeking compliant pathways can lead to better outcomes for users, the industry, and regulators themselves. This letter proves that.”

We thank the CFTC for working with us on this truly pioneering issue and look forward to launching more innovative products that instill confidence in users and set the right precedent.

— Brandon Millman, CEO