The US Commodity Futures Trading Commission has prolonged no-action relief for certain passive crypto-trading software providers, allowing them to connect users to regulated derivatives markets without registering as introducing brokers. The step came two days after the Senate blocked the CLARITY Act, a bill that had been closely watched as a possible route to broader market-structure legislation.
The relief is narrowly framed. It covers software that passively links customers to regulated venues, but it does not permit the software provider to take on functions associated with brokerage, custody, or personalized trading advice.
What the relief allows
According to the CFTC’s Market Participants Division, eligible providers may offer software that helps users access regulated derivatives markets and related information. Covered tools can include interfaces for viewing market data, reviewing products, and transmitting orders to registered trading venues.
The scope can also extend to software tied to self-custodial wallets, so long as the provider remains a passive technology intermediary rather than acting as a market professional. The central point of the staff position is that the software may facilitate access, but not step into the role of an introducing broker.
Where the line is drawn
The relief stops short once brokerage activity begins. Providers cannot decide how or where orders are routed or executed, cannot issue buy or sell signals, and cannot give personalized trading recommendations. They also cannot take custody of customer assets.
Any funds supporting derivatives positions must remain within the relevant clearing structure rather than with the software provider. In other words, the CFTC staff position permits passive connectivity, but not control over customer assets, trading decisions, or execution choices.
Conditions attached to the exemption
The division set out ten conditions for firms relying on the relief. These include disclosing conflicts of interest and fees, keeping evidence that required risk disclosures were provided, entering written joint-liability agreements with partners, notifying the agency in the event of insolvency, and accepting CFTC jurisdiction.
The staff also said providers may advertise their software, describe relationships with registered firms, promote derivatives contracts, and charge fees to both users and registered counterparties, provided they stay within the boundaries of the no-action position.
A limited staff position, not a final rule
The CFTC emphasized that the measure reflects the view of division staff rather than a binding determination by the full Commission. As a result, the relief can be modified, suspended, or withdrawn, and it could also expire if formal guidance on broker registration is later adopted.
Its timing is notable because it follows the Senate’s failure to advance the CLARITY Act. The source article also said the Securities and Exchange Commission has been taking action on related exemptions, suggesting that regulators are continuing to make targeted adjustments under existing authority even as larger legislative efforts remain stalled.
What comes next
For now, the confirmed next step is continued operation under the CFTC’s existing framework rather than a new statutory regime. Software providers that want to rely on the relief will need to remain within the passive model and satisfy the listed conditions, while the possibility of later Commission action or formal registration guidance remains open.
Source: Cryptopolitan