The U.S. Commodity Futures Trading Commission’s Market Participants Division issued a no-action position on September 17, 2026, letting qualifying providers of passive software avoid registration as introducing brokers or associated persons when connecting users to CFTC-registered derivatives firms and exchanges.
The position expands relief the division first granted to crypto wallet provider Phantom Technologies in March 2026 under Staff Letter 26-09, now broadening that framework so other similarly situated providers can rely on it directly, under the new Staff Letter 26-25, without requesting individual permission.
The Market Participants Division said in the letter that a no-action position for all similarly situated passive software providers, on substantially the same terms as those provided in Letter 26-09, was warranted given the growing number of providers operating in comparable circumstances.
The no-action position does not apply to providers that exercise discretion over how orders are routed or executed, generate express buy or sell signals, or take custody or control of user assets.
What Counts as Passive Software Under the CFTC’s Position
Covered providers can develop and distribute front-end interfaces that let users view market and position information, review products, and submit orders directly to registered market participants, including through a self-custodial crypto wallet.
| Trading Software Model | Regulatory Question |
| User selects strategy and settings | Is the provider only supplying technology? |
| Software executes user instructions | Does the provider control trading decisions? |
| Provider recommends or selects trades | Could the service become a regulated brokerage activity? |
| Provider takes custody of user assets | Does this trigger introducing-broker or associated-person registration? |
Table 1. Regulatory distinction between passive trading software and regulated brokerage activity.
The moment a software provider crosses from passive to active, introducing discretion over execution, custody of assets, or independent trade signals, the relief evaporates entirely, and the provider becomes subject to ordinary introducing-broker registration requirements.
Why This Matters Specifically for Crypto Wallets
The relief could make it easier for non-custodial crypto wallets and other apps to offer access to regulated derivatives, including perpetual contracts and prediction markets, without becoming CFTC-regulated introducing brokers themselves, an important distinction for platforms already navigating how crypto leverage trading works and why it carries risk.
A wallet could add a section letting users view and trade regulated derivatives, advertise the service, direct customers to a specific registered firm, and even receive a share of trading revenue, all while remaining outside introducing-broker registration, provided the wallet itself never exercises discretion over order routing or execution.
What This No-Action Position Does Not Cover
No-action positions are not the same as formal rulemaking. CFTC staff are saying they won’t recommend enforcement against providers meeting the stated conditions, not rewriting the Commodity Exchange Act or creating a binding legal safe harbor that survives changes in leadership or policy direction. Positions like this can be modified or withdrawn at any time.
The relief also doesn’t bind the Justice Department or change other federal laws related to money transmission, and it doesn’t address state-level licensing requirements that can separately apply to software providers facilitating access to financial markets.
Developers involved in other kinds of disputed software, such as the Tornado Cash cases, remain outside this relief entirely, since it applies specifically to software connecting users to registered derivatives markets, not decentralized mixing protocols.
Part of a Coordinated Regulatory Push the Same Day
The CFTC’s action arrived the same day the SEC issued its own “Innovation Exemption” for tokenized U.S. stocks, and two days after the Senate failed to advance the CLARITY Act. Together, the two agencies’ same-day actions suggest regulators are moving forward with narrower, agency-level relief for crypto-adjacent products, including prediction markets, even while broader congressional legislation remains stalled.
CFTC Chairman Michael Selig has previously indicated the agency intends to use its existing authority to regulate crypto markets regardless of the CLARITY Act’s status, a posture this no-action position reinforces.
What Comes Next for Passive Software Providers
The impact of the CFTC’s position will depend on how trading software providers structure their products and whether they satisfy the stated conditions. Companies offering automated or wallet-integrated trading tools will need to evaluate whether their systems remain within the passive category or whether their features cross into discretionary, custodial, or advisory territory that would trigger registration.
What this means for you: The CFTC’s no-action position gives clearer guidance for crypto wallets and similar apps that connect users to regulated derivatives markets, but it does not exempt all trading platforms from regulation. For users, the key distinction remains whether a platform simply executes their instructions or exercises discretion over their trades, and the relief itself can be modified or withdrawn at any time.
This article is for informational purposes only and does not constitute financial, legal, or investment advice. Automated trading systems and no-action relief involve technical, market, and regulatory risks that can change without notice.
