Phantom and Hyperliquid tell CFTC: onchain derivatives need a different rulebook

On 9 July 2026, two of the most prominent names in the consumer and institutional onchain stack asked the US derivatives regulator to rewrite parts of a rulebook written for Wall Street. Phantom, the consumer wallet, and Hyperliquid, the perpetuals-focused trading venue, submitted a joint letter to the Commodity Futures Trading Commission urging it to exempt blockchain developers and non-custodial wallet providers from rules designed for traditional financial intermediaries, according to a 19:36 UTC Cointelegraph report.

The petition, publicised the same day by the Hyperliquid Policy Center via CryptoBriefing's Telegram channel at 15:45 UTC, lands at a regulator that has spent two years arguing with itself over how much of legacy swap and futures law applies to software that never holds a dollar. The two companies are betting that the easier fight is not to repeal the rules but to redefine who they bind.

The ask, stripped down

Hyperliquid runs an order-book perpetuals exchange entirely onchain; Phantom ships a self-custodial wallet used by millions of retail traders to route into venues like Hyperliquid. Under the CFTC's existing framework, both could be argued to touch regulated activity at the edges: Hyperliquid because it clears swaps, Phantom because its wallet code interfaces with venues that do. The companies want a different answer.

The letter asks the Commission to confirm that writing or deploying non-custodial software does not, on its own, make a developer a futures commission merchant, a swap dealer, or any other registered intermediary. It is the same conceptual move that earlier crypto rulemaking made for money transmission, where the Treasury's regulators eventually conceded that pure software publishers are not money-services businesses. The CFTC has never made that concession in writing for derivatives, and the two firms want it now.

That is a narrower demand than the crypto industry sometimes presses for. It is not "exempt decentralised finance." It is "exempt the people who write code other people use." If granted, it would leave the trading venues themselves inside the perimeter, where Hyperliquid already operates, while pulling wallet developers and protocol engineers out of the registration net.

Why Hyperliquid is the lead petitioner

The choice of Hyperliquid as a co-signatory is not incidental. The exchange has, by volume, become one of the largest onchain venues for perpetual futures, and its governance token has been a closely watched proxy for how far decentralised trading can scale before regulators push back. Petitioning alongside a consumer wallet gives the filing a rhetorical pairing the CFTC cannot ignore: a regulated-seeming venue plus an obviously non-custodial tool.

The Hyperliquid Policy Center, the affiliated think-tank that has handled much of the venue's public-policy work, has argued for months that US rulemaking risks capturing code writers who have no control over user funds. The CFTC letter extends that line into a specific docket. It is also a positioning move: by filing jointly with Phantom, Hyperliquid ties its own regulatory fate to the broader developer ecosystem, on which it depends for order flow and front-end distribution.

What the CFTC actually controls

The CFTC's reach over derivatives is narrower than the Securities and Exchange Commission's reach over securities, but wider than is sometimes appreciated. It registers exchanges, clearinghouses, intermediaries, and trade repositories. It polices fraud and manipulation in derivatives markets. It does not, however, traditionally regulate software publishers whose products are used by others to transact.

That distinction is the entire fight. Under the existing definitions, an exchange that matches swaps must register; a wallet that signs transactions for the user must not. The grey zone is the front-end software that sits between the two, and the smart-contract code that automates settlement. Phantom's wallet, Hyperliquid's onchain order book, and the open-source libraries that connect them all touch the same transaction. Regulators have so far chosen not to say, in formal guidance, which of those layers counts as an intermediary.

The companies are asking the CFTC to do now what the Treasury eventually did for money transmission: draw the line at custody and control of customer funds, and leave the software layer alone. If the Commission agrees, it removes a class of legal opinions that has hung over wallet developers and protocol engineers for years. If it refuses, the onchain stack faces a choice between restricting US distribution or building compliance apparatus that contradicts its own architecture.

What the counter-argument looks like

Not everyone in Washington, or in crypto, will agree. Skeptics inside the regulator will ask what, in practice, distinguishes a non-custodial wallet that exclusively routes to one venue from an introducing broker with a thin technical wrapper. Consumer-protection hawks will argue that software authors benefit when users lose money, even if no funds pass through their servers, and that liability has to live somewhere. Larger incumbent exchanges, which already bear the cost of CFTC registration, will quietly resent a carve-out that lets newer venues skip the same overhead.

There is also a structural concern the filing does not address. Onchain venues can be rehypothecated by code rather than by intent; a wallet that signs on the user's behalf is, in moments of market stress, a single point of failure even if it never holds a balance. Regulators who have lived through the last five years of exchange collapses, both offshore and onshore, will not find that distinction trivial. The Hyperliquid Policy Center's argument that software is not an intermediary may hold in calm markets and weaken in crisis.

Stakes and the calendar

The CFTC is operating under acting leadership following a leadership turnover in 2025, which means rulemaking of this kind travels through a small policy staff before landing with a chair who has not yet signalled a position on developer liability. The agency has open dockets on perpetual-swaps reporting and on event-contract markets; both overlap with Hyperliquid's product surface, and both give staff a venue to write the developer exemption the petition requests, even if no standalone rule emerges.

For Phantom and Hyperliquid, the filing is a hedge. If the CFTC issues clarifying guidance, the cost of US distribution drops and a class of follow-on wallet and infrastructure projects becomes investable. If the Commission stays silent or issues a hostile interpretation, the onchain stack continues to route around US users the way it already does for much of spot trading.

The next signal will not be a press release. It will be a request for comment, a public roundtable, or a line buried in a speech. Whichever arrives first will tell the market whether the CFTC believes writing code is enough to make you a financial intermediary, or whether the answer, after two years of delay, is still no.

— Monexus framed this as a definitional fight, not a deregulation fight. Wire coverage led on the regulator-vs-industry angle; this publication read the letter as a request to draw a custody line the CFTC has so far refused to draw.

Wire provenance

This editorial synthesis draws on the following public wire/social posts:

• https://t.me/CryptoBriefing