Phantom Crypto Wallet Secures CFTC 'No-Action' Letter Exemption
Under the leadership of Chair Michael Selig, the US regulatory body has granted the firm permission to conduct specific operations without the need for broker registration.
On Tuesday, the United States Commodity Futures Trading Commission (CFTC) announced that its Market Participants Division had granted a no-action letter following a formal request submitted by Phantom Technologies, a cryptocurrency wallet provider.
According to a CFTC announcement, the no-action letter would prevent the division from recommending enforcement proceedings against Phantom or its employees for not registering as a broker, provided certain conditions are met.
Phantom stated that the no-action position will enable the firm to "act as a non-custodial interface connecting users to a registered exchange [...] without taking on the regulatory obligations of an introducing broker."
"With thanks to the CFTC's willingness to open their doors to facilitate innovation, we proactively engaged with the CFTC to seek clarity on how a non-custodial interface like Phantom could offer access to regulated markets through a registered partner, without acting as an intermediary that needs its own registration. Rather than building first and seeking forgiveness later, we took a different approach to give our users safe and reliable ways to access traditional financial markets."
Phantom
This no-action response from the regulator for a cryptocurrency firm marks one of the initial actions taken under CFTC Chair Michael Selig's leadership following his US Senate confirmation in December. Both Selig and Caroline Pham, former acting chair of the CFTC, have guided the commission during US President Donald Trump's administration, during which time the agency has granted multiple no-action letters to crypto platforms, including Polymarket and Binomial.
CFTC defends authority over prediction markets, plans coordinating with SEC
Selig has continued to assert what he describes as the CFTC's "exclusive jurisdiction" over the supervision of prediction market platforms such as Kalshi and Polymarket, even as numerous US state authorities have filed legal actions against these companies for purported violations of gambling regulations. In the previous week, he, serving as the sole CFTC commissioner, put forward a rule that could modify or introduce new regulations governing event contracts on prediction markets platforms, making it available for public feedback.
In the midst of the ongoing battle over prediction market regulation, the CFTC and Securities and Exchange Commission (SEC) executed a memorandum of understanding last week in an effort to conclude "regulatory turf wars." The two agencies have committed to implementing a "minimum effective dose" regulatory strategy.