CFTC Extends No‑Action Relief to Passive Crypto Wallet Software

The CFTC’s Market Participants Division issued Staff Letter 26‑25 on September 17, extending conditional no‑action relief to providers of “passive software.” The relief mirrors a framework previously granted to Phantom Technologies in March and now applies to a broader set of developers.

What the Relief Allows

Under the staff position, software such as wallets, browser extensions or websites may:

• Display market data and derivative contracts
• Enable users to submit orders directly to registered futures commission merchants, introducing brokers, or designated contract markets
• Collect transaction‑based fees
• Market the products without being required to register as an introducing broker

Key Limitations

Developers must keep the software “passive.” The rules prohibit:

• Custody of assets backing a derivatives position
• Providing explicit trading signals or advice
• Exercising discretion over order routing or execution
• Directing users to unregistered venues

Users must onboard directly with registered market participants, and covered providers must meet disclosure, record‑keeping, and marketing requirements.

Temporary Nature of the Position

The relief is a staff no‑action position, not a formal rule. It remains in effect until the CFTC adopts formal rulemaking or guidance addressing broker‑registration requirements for software providers.

Background

Phantom Technologies received similar relief on March 17 via Staff Letter 26‑09 for its self‑custodial wallet. The September extension broadens that approach to any similarly situated passive software provider.