CFTC Letter 26-25 lets passive wallets reach regulated derivatives without IB registration
By Crypto Wire
September 17, 2026
The CFTC’s Market Participants Division on Thursday, September 17, 2026 broadened no-action relief for passive software providers—including self-custodial crypto wallets—that connect users to CFTC-regulated derivatives without registering as introducing brokers. Secondary desks including Decrypt and The Crypto Times identify the position as Staff Letter 26-25, extending substantially the same terms as Letter 26-09 issued March 17 to Phantom Technologies. The Division’s quoted rationale: a no-action position for all passive software providers “on substantially the same terms” as Phantom “is warranted.”
Plain English Policy translation: if your app is only a front end—showing market data, products, and positions, and submitting orders directly to registered FCMs, IBs, or DCMs—staff will not recommend introducing-broker or associated-person enforcement for those covered activities, provided you stay inside the letter’s conditions. Covered products include event contracts, perpetual contracts, and other Commission-regulated derivatives. The software may ship inside a self-custodial wallet. The provider must not custody user assets, generate express buy/sell signals, or exercise order-routing discretion.
Users still trade as DCM members or as customers of registered intermediaries; margin and collateral stay with the clearing structure, not the wallet vendor. Providers may market relationships with registered counterparties, introduce users to specific FCMs/IBs/DCMs, and even take compensation or transaction-based fees—so long as users can still reach those entities without the software and the letter’s conditions hold. That marketing latitude is why the letter matters beyond a narrow “display-only” carve-out.
Conditions are the desk’s fine print. Crypto Times summarizes a ten-point stack: no statutory disqualification for the provider and relevant personnel; disclosures of relationships, conflicts, and fees; risk disclosures with acknowledgment records; users must be DCM members or FCM/IB customers; marketing and communications policies; avoid IB-style promotional practices that would need NFA pre-approval if registered; written agreements with each registered entity covering joint and several liability for connected violations; CFTC-consistent recordkeeping; insolvency/bankruptcy notices to the agency; and a filing agreeing to the conditions and submitting to jurisdiction. Relief ends if the Division modifies it or if the Commission adopts a rule answering the IB-registration question for software developers.
Industry reaction treated the letter as clarity after years of ambiguity. Digital Chamber CEO Cody Carbone said software providers connecting users to registered FCMs/DCMs no longer must register as brokers “just for building the interface.” Blockchain Association CEO Summer Mersinger called it a more functional approach that looks at what a technology provider actually does. Phantom’s Brandon Millman, quoted via Crypto Times, framed March’s Phantom letter as the first path and Thursday’s expansion as opening that path to other non-custodial software providers. Coinbase Vice Chairman Ryan VanGrack bundled the CFTC move with the same-day SEC Innovation Exemption as relief arriving “gradually, then suddenly.” Attribute those quotes to their X posts and secondary reporting—not as CFTC press copy.
Timing sits two days after the Senate’s 49–50 cloture failure on the CLARITY Act (H.R. 3633) on September 15. Chairman Michael Selig said the agency would keep using existing authority for crypto-market rules. Staff Letter 26-25 does exactly that for one registration choke point; it is not a Commission rule and does not rewrite market structure. For NFT and crypto readers, the practical watch is which wallets and trading UIs file under the letter and which regulated venues they wire for event contracts and perpetuals—without the vendor ever holding keys or choosing routes.
What Thursday’s file does not prove is automatic product launches inside every major wallet. Filing under Letter 26-25, negotiating joint-liability agreements with FCMs and DCMs, and shipping compliant disclosures are operational work. Watch which venues pair with which wallets first, whether event-contract rails arrive before crypto perpetuals in the same UI, and whether any provider’s marketing drifts into IB-style solicitation that would void the passive-software framing. Until those integrations ship, treat the letter as regulatory permission architecture rather than live order-flow volume.
On September 17, the Policy takeaway is narrow: CFTC staff extended Phantom-style no-action relief industry-wide for passive, non-custodial software that only surfaces regulated derivatives through registered intermediaries—clarity for wallet interfaces, not a free pass to custody, discretionary routing, or unregistered brokerage.
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