Summary
The CFTC issued a no-action position broadening regulatory relief for "passive software" providers: as long as they do not custody assets, do not make trading decisions on users' behalf, and work with regulated institutions that provide proper disclosures, such providers will not be recommended as…
Key points
- It defines the boundary of how much trading and prediction market functionality wallets and front-end apps can offer without triggering broker registration requirements.
- The passive software exemption lowers the bar for non-custodial wallets to connect with regulated derivatives markets, directly affecting product functionality and compliance design.
- Non-custodial wallet and trading interface developers can connect to designated contract markets without registering as brokers, but must strictly avoid custody and discretionary decision-making.
- The article notes the move expands the earlier allowance granted to Phantom Technologies' self-custodial wallet in March 2026 and continues July 2026 calls by non-custodial wallet operators for broader protection.
Editorial note
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