The Commodity Futures Trading Commission (CFTC) has issued a no-action letter in response to Phantom, clearing the self-custodial crypto wallet provider to facilitate regulated derivatives trades without needing to register with the federal derivatives supervisor.

Regulator Exemption: Published this morning, CFTC Letter No. 26-09 issues a no-action position to Phantom, clearing the crypto wallet software provider to offer regulated derivatives trading functionality through its self-custodial wallet without needing to register as an introducing broker or associated person of an introducing broker. It is important to note that this no-action letter exclusively covers regulated futures trading.

Conditional Relief: To receive regulatory relief, Phantom users must transact through CFTC-regulated Designated Contract Markets (DCMs), and at no point can Phantom take control of user funds. Additionally, Phantom must provide users with proper risk disclosures, maintain compliance policies governing marketing and communications, and keep records related to its derivatives-related activities.

Derivatives Ambitions: According to the CFTC’s letter, Phantom plans to expand its self-custodial wallet’s capabilities, enabling users to trade CFTC-regulated derivatives with their crypto assets through a front-end interface developed, provided, and maintained by Phantom.

While CFTC Letter No. 26-09 clears Phantom to integrate regulated futures offerings, it provides no guidance on unregulated integrations.