Phantom and Hyperliquid Push CFTC to Update Crypto Derivatives Rules
Phantom and Hyperliquid urged the CFTC to exempt blockchain developers and non-custodial wallet providers from outdated traditional finance regulations.
Crypto wallet provider Phantom and derivatives exchange Hyperliquid formally called on the Commodity Futures Trading Commission this week to modernize its regulatory framework to account for the realities of onchain derivatives markets, according to a Cointelegraph report. The two companies argued that existing CFTC rules were designed for traditional financial intermediaries and do not translate cleanly to decentralized, blockchain-based systems.
At the heart of their argument is a request for the CFTC to carve out explicit exemptions for blockchain developers and non-custodial wallet providers — two categories of participants that neither hold customer funds nor act as brokers in any conventional sense. The companies contend that applying legacy brokerage or intermediary rules to these entities would stifle innovation without meaningfully advancing investor protection goals the rules were originally meant to serve.
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The push comes at a moment when the CFTC is facing growing pressure from across the digital-asset industry to clarify its jurisdiction and update guidance that critics say lags far behind the technology it attempts to govern. Non-custodial platforms, by design, never take direct control of user assets, creating a fundamental mismatch with regulatory frameworks built around custodians and clearinghouses.
If the CFTC were to grant the requested exemptions, it could set a significant precedent for how U.S. regulators distinguish between traditional financial gatekeepers and the open-source infrastructure layers that underpin decentralized finance. The outcome could influence how other agencies, including the SEC, approach similar boundary questions in their own rulemaking. Both Phantom and Hyperliquid are positioning themselves as constructive partners in that regulatory conversation rather than adversaries resisting oversight.
Continue reading at Cointelegraph.
