The CFTC has eased regulations for passive trading software developers, allowing them to operate without broker-dealer registration under certain conditions.
The U.S. Commodity Futures Trading Commission (CFTC) has announced a relaxation of regulations for developers of "passive" trading software, which will allow them to operate without registering as broker-dealers under specific conditions. This decision is aimed at providing more flexibility in the trading software market.
.@CFTC Staff Issues No-Action Position to Providers of Passive Software: https://t.co/irgUh9JejX
— CFTC (@CFTC) September 17, 2026
This new policy allows software developers to provide services that display market data, user positions, and product information, as well as route orders to registered market participants. It encompasses various products, including event contracts and perpetual futures, and is not limited to cryptocurrency offerings.
Developers can create standalone software or integrate it into existing applications, including crypto wallets. However, they must ensure that the functions related to regulated derivatives are distinct from other application features.
Restrictions on Control
Importantly, software developers are barred from controlling user assets or providing direct buy or sell signals. Orders must be sent straight to registered market participants, ensuring that users maintain direct relationships with brokers or trading venues without intermediary applications.
While developers can promote their services and earn from partner revenues or transaction fees, they are required to disclose any potential conflicts of interest, inform users about risks, and adhere to advertising regulations set by the CFTC and the National Futures Association. They must also maintain records of their activities and accept the regulator's jurisdiction.
Context and Future Implications
This regulatory easing follows a similar approach taken by the CFTC in March for wallet developer Phantom, prompting other firms to request similar leniencies. These measures are temporary and will remain in place until the CFTC establishes formal rules for software developers. The agency clarified that this opinion is non-binding and subject to revocation.
The announcement coincided with the recent failure of the CLARITY Act in the Senate, with CFTC Chairman Michael Selinger and SEC Chair Gary Gensler affirming their commitment to drafting rules for the cryptocurrency sector without new legislation. On the same day, the SEC granted a five-year exemption for on-chain trading of tokenized stocks, further indicating a shift in regulatory approaches. Additionally, U.S. regulators are seeking public input on definitions related to crypto derivatives, including swaps and perpetual futures.
