Hyperliquid, Phantom Ask CFTC to Exempt DeFi From Broker Rules

The Hyperliquid Policy Center and wallet provider Phantom filed a joint comment with the Commodity Futures Trading Commission on Thursday, arguing the agency's registration rules for exchanges and brokers should not apply to onchain protocol software or non-custodial wallets, according to HPC's own post on X.

The filing responds to a request for information the CFTC and SEC issued jointly in mid-June, seeking industry input on rules that hinder financial-technology innovation.

Three Requests

HPC and Phantom laid out three asks. First, confirmation that publishing onchain protocol software alone does not trigger registration as an exchange or clearinghouse. Second, a clear path for firms already registered with the CFTC to run regulated functions, like matching and clearing, on onchain infrastructure. Third, and most concrete, turning the no-action relief the CFTC granted Phantom in March into a formal rule that would extend to other non-custodial wallet providers.

"The Commission's preexisting rules were built for legacy markets," HPC and Phantom wrote, arguing that onchain markets let users hold their own funds and trade directly, without the chain of intermediaries that broker-dealer rules assume.

The filing lands under CFTC Chairman Michael Selig, who took office in December and has since approved the first U.S.-regulated bitcoin perpetual futures contract in May and opened the door to more onshore perps trading. CME Group has separately sued the CFTC over that approval, arguing perpetual futures should be classified as swaps.