Key Takeaways
On September 17, 2026, CFTC staff issued no-action Letter 26-25, telling any provider of passive crypto software it will not be recommended for enforcement for failing to register as an introducing broker.
The relief covers DeFi front ends and self-custodial wallets that display market data and pass user orders to registered futures commission merchants, introducing brokers, and designated contract markets.
It is industry-wide, replacing a firm-specific letter that only Phantom Technologies could use, and it runs until the CFTC writes formal rules, subject to ten conditions.
The CFTC just told crypto developers that writing passive software is not the same as being a broker. In a staff no-action letter numbered 26-25, the agency's Market Participants Division said it will not recommend enforcement against makers of passive software that let users trade regulated crypto derivatives, even though those firms are not registered as introducing brokers. The relief reaches DeFi interfaces and self-custodial wallet providers that show market data and positions and route orders to registered venues, including for event contracts and perpetual contracts.
The shift is that this now applies to everyone, not one company. The position grew out of Letter 26-09, issued in March to Phantom Technologies, but a no-action letter only protects the firm it names, so no one else could rely on it. Letter 26-25 makes the relief industry-wide, with ten conditions attached. Qualifying software has to be a neutral pipe, no active management, no advice, no executing trades for users, and providers must keep compliance policies, make disclosures, and accept the CFTC's enforcement jurisdiction. The relief lasts until the agency issues formal rules.
The timing tells the story. This lands right after the CLARITY Act failed in the Senate, and it fits the pattern WYDE covered when the CFTC and SEC said they would lean on existing authority instead of waiting for Congress. With no new law, the agencies are drawing the lines themselves, one letter at a time, and this one draws a lane for the developers who build the front ends.
People Also Ask
What is CFTC Letter 26-25?
It is a staff no-action letter issued September 17, 2026 that says the CFTC will not recommend enforcement against passive software providers for failing to register as introducing brokers, subject to ten conditions.
Who does the CFTC relief cover?
It covers developers of passive software, including DeFi front ends and self-custodial wallets, that display market data and pass user orders to registered futures commission merchants, introducing brokers, and designated contract markets.
What is passive software under the letter?
Passive software acts as a neutral routing tool. It cannot manage accounts, give advice, or execute trades on a user's behalf, and providers must meet compliance and disclosure conditions.
How long does the no-action relief last?
The relief runs until the CFTC issues formal rulemaking or guidance that supersedes the staff position, making it a temporary bridge rather than a permanent rule.