Hyperliquid Policy Center and Phantom press CFTC on onchain rules
DeFi & Yields ·
Two crypto entities want regulators to stop treating open-source protocol code the same way they treat licensed brokers and exchanges.
Hyperliquid Policy Center and Phantom filed a joint comment letter with the Commodity Futures Trading Commission asking the agency to revisit how it classifies onchain market infrastructure, according to wublockchain.xyz. The submission asks the CFTC to state plainly that simply releasing protocol software does not, by itself, trigger a registration obligation under existing rules.
The letter also seeks a defined route by which regulated exchanges and clearinghouses could incorporate onchain systems into their operations, rather than leaving that integration governed by ambiguous or case-by-case guidance. A separate request asks the agency to turn an earlier non-action letter issued to Phantom into a permanent, codified rule, giving the position durable legal standing instead of leaving it as informal staff guidance.
Underlying the filing is an argument that the CFTC's current framework was built around custodial intermediaries who hold client funds and execute trades on their behalf, a structure that does not map cleanly onto self-custodial, transparent onchain markets where users retain control of assets directly. The Block reported that the two organizations are pushing the agency to draw a firmer line between decentralized protocols and the brokers and exchanges the existing rules were designed to police.
Other accounts of the filing describe overlapping asks: one characterization frames the submission as seeking formal recognition that onchain protocols do not require registration and that non-custodial wallets should not be classified as financial intermediaries, while another describes it as a request for an exemption covering both onchain protocols and non-custodial wallets from registration requirements. Four distinct sources have covered the filing, generally agreeing on its core asks even where phrasing of the request varies.
What remains unresolved is whether the CFTC will act on any of the three requests, and on what timeline. The letter is a comment submission rather than a rulemaking petition with a mandated response, so there is no indicated deadline by which the agency must reply or take a position on codifying the Phantom non-action letter or defining a pathway for regulated exchanges to adopt onchain infrastructure.