Phantom Technologies and HyperLiquid Policy Center submitted joint comments to the Commodity Futures Trading Commission asking it to update its rules for on-chain market infrastructure.
The comments were in response to the CFTC’s request for information on regulations that could restrict fintech companies from partnering with financial infrastructure or Commission-regulated intermediaries.
Phantom and HPC said that while current rules generally envision a custodial market structure where intermediaries process customer orders and funds, on-chain markets allow users to trade directly and maintain control of their assets.
The group called on the CFTC to ensure that the development or contribution of on-chain protocol software does not itself trigger registration with the European Commission. They said registration should apply to companies that actually process customer orders or funds or conduct transactions with customers, rather than single software protocols or developers.
Phantom and HPC also asked the CFTC to give registered exchanges, clearinghouses, and intermediaries a path to use on-chain infrastructure for regulated functions.
Comments stated that designated contract markets should be able to use on-chain protocols for matching and execution, while derivatives clearing houses should be able to use on-chain protocols for margin, settlement, clearing, and default management.
The filing also asks the CFTC to turn its recent phantom no-action letter into a formal rule. The letter provided relief to Phantom as a non-custodial wallet provider whose role is limited to providing technical access to regulated markets. Phantom and HPC said the rulemaking will provide broad certainty to similar wallets and front-end providers.
Phantom said it does not hold users’ funds, manage private keys, or conduct transactions or intermediary transactions between users. HPC described itself as an advocacy organization focused on creating regulated pathways for Americans to access on-chain markets, including those available on Hyperliquid.
Phantom integrates Hyperliquid through its interface, but this feature is not available to users in the United States. The organizations said they are working together to support regulations that would allow Americans to access on-chain derivatives markets under the supervision of the CFTC.
