Author: Phantom
Compiled by Deep潮 TechFlow
Shenchao Overview: Phantom has received a significant exemption letter from the CFTC—crypto wallets no longer need to register as "introducing brokers" to directly connect users to compliant derivatives and event contract exchanges.
This is the first instance of its kind globally, and Phantom’s approach itself is also noteworthy:
Proactively engage with regulators, comply first before launching, rather than building first and seeking forgiveness later—this approach may become a new blueprint for the crypto industry in its interactions with regulators.
The full text is as follows:
We are pleased to announce that the CFTC has confirmed, via a no-action relief letter, that Phantom may directly provide users with access to regulated markets within the Phantom app without registering as an introducing broker, in collaboration with its CFTC-registered partners.
This is an important milestone and a result we proudly achieved together with the CFTC.
Content of the exemption letter
As a software provider, Phantom can now serve as a non-custodial interface connecting users to registered exchanges (such as designated contract markets, or DCMs) without assuming the regulatory obligations of an introducing broker.
This letter includes several conditions designed to ensure the implementation of the CFTC's policy priorities while safeguarding user rights.
Under this mode, users can submit orders directly to registered exchanges, and Phantom never touches customer funds. This requirement applies specifically to custodial models with registered exchange partners and does not cover DeFi derivatives or tokenized prediction markets.
Our approach
The entire process that led to Phantom receiving this exemption letter is exactly how the regulatory process should operate.
We appreciate the CFTC’s willingness to open its doors to innovation and have proactively engaged with the CFTC to seek clear guidance on how to provide users with access to regulated markets through a non-custodial interface via registered partners, without having to register ourselves as intermediaries.
We did not choose to build first and ask for forgiveness later; instead, we took a different path, providing users with secure and reliable ways to access traditional financial markets. This letter is the result of that process.
The significance beyond Phantom
This is the first global exemption of its kind. The CFTC letter acknowledges that they are working on rules or guidance that may eventually replace this letter, and we hope our involvement will help shape a lasting framework that benefits the entire industry.
We also thank the CFTC for their diligent and good-faith collaboration with us. Addressing truly groundbreaking legal issues requires effort from both sides, and this outcome reflects our mutual willingness to do the work rather than defaulting to refusal.
Phantom was founded on the belief that crypto should be secure and easy to use. We are committed to continuously leading the development of innovative, compliant, and user-first products.
The key to making cryptocurrency secure and user-friendly is to develop financial products governed by clear and sensible regulation. Engaging with regulators early and seeking compliance pathways when necessary leads to better outcomes for users, the industry, and regulators themselves. This letter is proof of that.
We thank the CFTC for partnering with us to address this truly groundbreaking issue, and we look forward to introducing more innovative products to consumers in a way that builds user confidence and sets the right precedent.
—Brandon Millman, CEO