The no-action place taken by the US regulator beneath Chair Michael Selig will permit the corporate to have interaction in sure actions with out registering as a dealer.
The US Commodity Futures Trading Commission (CFTC) said Tuesday that its Market Participants Division issued a no-action letter in response to a request from crypto wallet provider Phantom Technologies.
A CFTC notice said that the no-action letter would, under certain circumstances, stop the division from recommending that the regulator take an enforcement action against Phantom or its staff for failure to register as a broker.
According to Phantom, the no-action position will allow the company to “act as a non-custodial interface connecting users to a registered exchange […] with out taking up the regulatory obligations of an introducing dealer.”
“With due to the CFTC’s willingness to open their doorways to facilitate innovation, we proactively engaged with the CFTC to hunt readability on how a non-custodial interface like Phantom may provide entry to regulated markets by a registered associate, with out performing as an middleman that wants its personal registration,” stated Phantom. “Relatively than constructing first and in search of forgiveness later, we took a unique strategy to present our customers protected and dependable methods to entry conventional monetary markets.”
The regulator’s no-action response for a crypto firm was one of many first taken beneath the management of the CFTC Chair Michael Selig since his US Senate affirmation in December. Selig and former CFTC performing chair Caroline Pham led the fee beneath US President Donald Trump because it issued a number of no-action letters for crypto platforms, together with Polymarket and Binomial.
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Selig continues to defend what he referred to as the CFTC’s “unique jurisdiction” in overseeing prediction market platforms like Kalshi and Polymarket within the face of a slew of US state authorities submitting lawsuits in opposition to firms for alleged violations of playing legal guidelines. Final week, he, as the only real CFTC commissioner, proposed a rule that would amend or difficulty new laws over occasion contracts on prediction markets platforms, opening it to public remark.
Amid the tussle over regulating prediction markets, the CFTC and Securities and Alternate Fee (SEC) final week signed a memorandum of understanding in an try to finish “regulatory turf wars.” Each businesses agreed to undertake a “minimal efficient dose” regulatory technique.
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