Hyperliquid Policy Center and non-custodial wallet provider Phantom filed a joint comment with the Commodity Futures Trading Commission ahead of the July 9 deadline, requesting exemption of decentralized finance protocols from traditional intermediary regulations. The filing responds to a CFTC request for information issued on June 18 that asked the industry to identify rules hindering financial technology development. The two organizations argue that onchain software and self-custodial wallets function as tools rather than the intermediaries that existing derivatives rules were designed to govern.
HPC and Phantom Request Three Regulatory Clarifications
The joint submission sets out three specific requests to the CFTC. First, HPC and Phantom want confirmation that publishing onchain protocol software does not alone require registration as an exchange or clearinghouse. Second, they request that registered exchanges and clearinghouses be permitted to run regulated functions on onchain systems, allowing modernization of US derivatives rules while maintaining compliance duties. Third, they want the March no-action relief granted to Phantom formalized into a permanent rule, which would extend the same regulatory certainty to other wallet providers.
Non-Custodial Wallets Distinguished From Intermediaries
HPC and Phantom argue that non-custodial wallets never hold customer funds or execute trades, and therefore should not carry intermediary obligations. The groups stated in their joint comment that rules built for onchain markets would keep developers in the United States rather than offshore. They add that transparent DeFi markets can settle faster and cut counterparty risk. The filing frames the request as within the CFTC's current authority, with HPC and Phantom stating in their joint statement that "this is our answer, and it is within the Commission's own authority to act on."
CFTC Under Selig Approved Onshore Perpetual Futures
The filing arrives under CFTC Chairman Michael Selig, who took office in December. Since taking office, Selig has pushed US crypto regulation toward clearer rules and approved onshore perpetual futures. The CFTC will weigh industry responses before deciding whether to issue guidance or begin rulemaking.
FAQ
What did Hyperliquid Policy Center and Phantom request from the CFTC?
Hyperliquid Policy Center and Phantom filed a joint comment ahead of the July 9 deadline requesting three regulatory clarifications: confirmation that publishing onchain protocol software does not require registration as an exchange or clearinghouse, permission for registered entities to run regulated functions onchain, and formalization of the March no-action relief granted to Phantom into a permanent rule for all wallet providers.
Why do HPC and Phantom argue non-custodial wallets should be exempt from intermediary rules?
HPC and Phantom argue that non-custodial wallets never hold customer funds or execute trades, distinguishing them from the intermediaries that existing derivatives rules were written to govern. The groups state that onchain software and self-custodial wallets function as tools rather than intermediaries subject to traditional regulatory obligations.
