Phantom Secures CFTC Exemption, Crypto Wallet First to Connect Directly to Compliant Derivatives Market

Phantom can now serve as a non-custodial interface, connecting users to registered exchanges without bearing the regulatory obligations of introducing brokers.

Author: Phantom

Translation: Deep潮 TechFlow

Deep潮 Guide: Phantom has received a significant exemption letter from the CFTC — crypto wallets can connect users directly to compliant derivatives and event contract exchanges without registering as an “introducing broker.”

This is the first such case worldwide, and Phantom’s approach is also noteworthy:

Proactively engaging with regulators, complying first before launching, rather than building first and asking for forgiveness — this approach could set a new standard for how the crypto industry interacts with regulators.

Full text below:

We are pleased to announce that the CFTC has confirmed through a no-action relief letter that: in collaboration with registered partners, Phantom can provide users with direct access to regulated markets within the Phantom app without registering as an introducing broker.

This is an important milestone and a proud achievement in our joint efforts with the CFTC.

Content of the Relief Letter

As a software provider, Phantom can now act as a non-custodial interface, connecting users to registered exchanges (such as designated contract markets, DCMs) without taking on the regulatory obligations of an introducing broker.

The letter includes several conditions designed to ensure the enforcement of CFTC’s policy priorities while protecting user rights.

Under this model, users can submit orders directly to registered exchanges, with Phantom never handling customer funds. This regulation specifically applies to custodial models working with registered exchange partners and does not cover DeFi derivatives or tokenized prediction markets.

Our Approach

The process that led Phantom to obtain this relief letter exemplifies how regulatory procedures should work.

Thanks to the CFTC’s willingness to open the door to innovation, we proactively engaged with the agency to seek clear guidance on how to provide users with access to regulated markets via a non-custodial interface through registered partners, without needing to register as an intermediary ourselves.

We chose not to build first and ask for forgiveness later, but instead took a different path to offer users a safe and reliable way to access traditional financial markets. This letter is the result of that effort.

Significance Beyond Phantom

This is the first global exemption of its kind. The CFTC’s letter acknowledges their ongoing efforts to develop rules or guidelines that could eventually replace this exemption. We hope our participation helps shape a lasting framework that benefits the entire industry.

We also thank the CFTC for their serious and honest cooperation. Addressing truly pioneering legal issues requires effort from both sides, and this outcome reflects a mutual willingness to do the work rather than default to rejection.

Phantom was founded on the belief that crypto should be safe and easy to use. We are committed to continuously leading the development of innovative, compliant, and user-centric products.

“The key to making crypto safe and user-friendly is to create financial products governed by clear, reasonable regulations. Engaging early with regulators when necessary and seeking compliant pathways will lead to better outcomes for users, the industry, and regulators themselves. This letter proves that.”

We thank the CFTC for working with us on this truly groundbreaking issue and look forward to launching more innovative products that empower users and set the right example for consumers."

— Brandon Millman, CEO