Phantom and Hyperliquid Ask the CFTC to Stop Treating Code Like a Broker

Phantom Technologies and the Hyperliquid Policy Center filed a joint comment letter with the CFTC on July 9, 2026.

Their argument is simple. Regulation should attach to the entities that hold customer funds and control customer orders, not to the open-source code or the wallet interface a person uses to reach a market.

The letter came in response to a CFTC request for information about rules that may block fintech firms from partnering with regulated financial infrastructure.

This is advocacy, submitted on the agency’s comment deadline. It is not a CFTC decision, exemption, or new rule.

Writing the software isn’t running the market. The same should hold true on-chain.

With the right rules, the CFTC can modernize these markets, keep builders in the United States, and give customers more control over their funds. Today, with @phantom , we filed a joint comment… https://t.co/8CcxkuS237

— Hyperliquid Policy Center (@HyperliquidPC) July 9, 2026

The joint comment letter runs six pages and serves as the direct blueprint for the policy change the two organizations want. It was filed on the CFTC’s July 9 deadline in response to the agency’s fintech review.

Phantom describes itself as a non-custodial wallet and software interface provider. It says it does not hold user funds, control private keys, execute trades between users, or intermediate transactions, placing its role on the software-access side of the market rather than inside custody or trade execution.

The Hyperliquid Policy Center describes itself as an independent research and advocacy group focused on a regulated path for American access to on-chain markets. The letter identifies Hyperliquid as a general-purpose Layer 1 blockchain that supports financial activity, including derivatives markets.

The letter says Phantom has integrated Hyperliquid into its interface, but that the functionality is not available to U.S. users today. The filing is therefore asking the agency to create a workable regulated path forward, rather than describing access that Americans already have.

The organizations ask the CFTC for three specific things.

First, confirm that developing or contributing to on-chain protocol software does not by itself trigger registration when the developer has no ongoing control over how the software is used.

Second, issue guidance for registered exchanges, clearing organizations, and futures commission merchants that want to use on-chain infrastructure for execution, margining, settlement, clearing, default management, and recordkeeping while still meeting Commodity Exchange Act requirements.

Third, codify the functional analysis in CFTC Letter No. 26-09, Phantom’s March no-action letter, so passive non-custodial wallets and front ends are not treated as introducing brokers just for providing technical access.

The filing draws a clean line. Registration should follow the people or entities that handle customer orders, hold customer funds, or enter into transactions with customers.

The alternative the letter names is a status quo where American users stay walled off from on-chain derivatives while builders and volume keep moving offshore.

The review that drew this filing started with the CFTC’s June 18 Federal Register notice.

The agency asked market participants to flag rules, guidance, orders, and no-action letters that make it harder for fintech firms to partner with CFTC-regulated exchanges, clearinghouses, futures commission merchants, introducing brokers, and swap dealers.

It also asked which processes could be streamlined for eligible fintech firms while preserving market integrity, financial stability, and customer protection. July 9 was the comment deadline.

The notice ties back to President Trump, who signed Executive Order 14405 on May 19, 2026. That order directed federal financial regulators to review rules, guidance, supervisory practices, and application processes that could be updated to encourage innovation and competition.

The notice folds digital asset and blockchain-based services into its definition of fintech, which puts filings like this one squarely inside the review.

Cointelegraph reported on July 9 that the two groups want blockchain protocol developers and non-custodial wallet providers kept out of registration categories built for firms that hold assets and process trades. The report emphasized custody, order handling, and transaction control as the functions the proposal would keep inside the regulatory perimeter.

The report summarized the same three asks and framed the second as guidance that would let registered derivatives firms use blockchain infrastructure for execution, clearing, settlement, margining, and recordkeeping while continuing to meet their existing obligations.

Cointelegraph placed the filing inside the larger fight over on-chain derivatives. It cited reported pressure from ICE and CME for more scrutiny of Hyperliquid, arguments over a level playing field for 24/7 perpetual futures, and CME’s June lawsuit challenging the CFTC’s approval of crypto perpetual futures.

The report also noted that CME has expanded its regulated crypto-derivatives lineup with contracts tied to additional digital assets, Bitcoin volatility, and a broader crypto index. That expansion makes the current dispute a fight over regulatory structure, infrastructure, and competitive access to always-on markets.

THE BLOCK: The Hyperliquid Policy Center and Phantom asked the CFTC to update its rules, arguing that on-chain protocol software should not have to automatically trigger registration requirements as a broker, exchange, or clearinghouse. pic.twitter.com/DIz4drvvBN

— The Block (@TheBlockCo) July 9, 2026

The distinction the filing pushes has been the core self-custody argument in crypto for years. A protocol is not a person, and a wallet that never touches your keys is not an exchange.

What has changed is the venue. Instead of fighting that fight in enforcement actions after the fact, Phantom and the Hyperliquid Policy Center are making the case inside a formal review the CFTC opened on its own.

Nothing here grants either group new authority or changes the law. The CFTC still has to decide what, if anything, to do with a comment letter.

But a functional test that follows custody and control, rather than the mere act of shipping code, is the kind of rule that lets regulated American firms build on-chain instead of watching the activity settle somewhere else. That is the case now sitting in front of the agency.

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