Phantom, Hyperliquid Urge CFTC to Update Derivatives Rules

Two prominent firms in the digital asset sector have formally requested that U.S. derivatives regulators clarify how existing rules apply to blockchain-based trading infrastructure, arguing that software developers and non-custodial tool providers should not be treated like traditional financial intermediaries.

Phantom, a non-custodial wallet provider, and the Hyperliquid Policy Center, an advocacy group, submitted a joint comment letter to the Commodity Futures Trading Commission (CFTC) on July 9. The filing responds to a request for information the CFTC issued in mid-June, seeking industry input on regulations that may be hindering financial technology innovation.

The core argument is that current CFTC regulations were designed for a market structure reliant on centralized intermediaries-such as brokers, exchanges, and clearinghouses-that take custody of customer funds and execute trades. In contrast, the groups contend that on-chain or decentralized finance systems can allow users to transact directly with one another while retaining control of their assets, with software acting as a tool rather than an intermediary.

Based on this distinction, the filing makes three specific...