The no-action position taken by the US regulator under Chair Michael Selig will allow the company to engage in certain activities without registering as a broker.
The US Commodity Futures Trading Commission (CFTC) said Tuesday that its Market Participants Division issued a no-action letter in response to a request from crypto wallet provider Phantom Technologies.
A CFTC notice said that the no-action letter would, under certain circumstances, stop the division from recommending that the regulator take an enforcement action against Phantom or its staff for failure to register as a broker.
According to Phantom, the no-action position will allow the company 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,” said Phantom. “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.”
Source: Phantom co-founder and CEO Brandon MillmanThe regulator’s no-action response for a crypto company was one of the first taken under the leadership of the CFTC Chair Michael Selig since his US Senate confirmation in December. Selig and former CFTC acting chair Caroline Pham led the commission under US President Donald Trump as it issued several no-action letters for crypto platforms, including Polymarket and Binomial.
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CFTC defends authority over prediction markets, plans to coordinate with SEC
Selig continues to defend what he called the CFTC’s “exclusive jurisdiction” over prediction market platforms like Kalshi and Polymarket. This comes as several US state authorities have filed lawsuits against such companies for alleged violations of gambling laws.
Last week, he, as the sole CFTC commissioner, proposed a rule that could amend or issue new regulations over event contracts on prediction markets platforms, opening it to public comment.
Amid the tussle over regulating prediction markets, the CFTC and Securities and Exchange Commission (SEC) last week signed a memorandum of understanding in an attempt to end “regulatory turf wars.” Both agencies agreed to adopt a “minimum effective dose” regulatory strategy.
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Source: https://cointelegraph.com/news/cftc-no-action-letter-crypto-wallet-phantom?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
