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

Author: Phantom

Translation: Deep Tide TechFlow

Deep Tide Introduction: Phantom has obtained a significant exemption letter from the CFTC — crypto wallets do not need to register as “introducing brokers” to directly connect users to compliant derivatives and event contract exchanges.

This is the first case of its kind worldwide, and Phantom’s approach is also noteworthy:

Proactively communicating with regulators, complying first before launching, rather than building first and asking for forgiveness — this approach could become a new model for the crypto industry to engage 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 access to regulated markets directly within the Phantom app without registering as an introducing broker.

This is an important milestone and a proud achievement of 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 bearing 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 in partnership with registered exchanges 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.

We appreciate the CFTC’s willingness to support innovation. We proactively engaged with the CFTC to seek clear guidance on how to provide users with access to regulated markets through registered partners without needing to register as an intermediary ourselves.

Instead of building first and asking for forgiveness later, we chose a different path — providing users with 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 for this specific model. The CFTC acknowledges that they are working on rules or guidelines that may eventually replace this letter. We hope our participation can help 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 with regulators early 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 inspire confidence and set the right precedent for consumers."

— Brandon Millman, CEO