The Hyperliquid Policy Center (HPC) and non-custodial wallet provider Phantom have jointly urged the US Commodity Futures Trading Commission (CFTC) to modernize its regulatory approach to decentralized finance. According to reports from CoinDesk, the organizations filed a response to the agency's Request for Information on evolving financial technology, arguing that onchain infrastructure should not be regulated like traditional financial intermediaries. The filing comes as the CFTC and the US SEC jointly released a request for comments in June, seeking industry input on regulatory rules affecting financial innovation. The joint comment was filed ahead of the July 9, 2026 deadline responding to the CFTC's June 18 RFI that asked the industry to flag rules that hold back financial technology. The letter, addressed to CFTC Secretary Christopher Kirkpatrick, responds to the Commission's Request for Information (RIN 3038-ZA24), published in the Federal Register on June 18, 2026, which was issued under Executive Order 14405 and seeks to identify regulations that unduly impede fintech firms from partnering with CFTC-regulated markets and intermediaries.
In their latest filing, HPC and Phantom have specifically requested three critical exemptions from CFTC regulation. First, they seek protection for non-custodial software developers who publish onchain protocols, arguing that users should control funds rather than the platform automatically triggering CFTC registration as an exchange or clearinghouse. Second, they want the no-action relief granted to self-custodial wallets - as issued to Phantom in March 2026 - to be made formal guidance, which would allow non-custodial DeFi front-ends to handle even US tokenized stocks without broker-dealer or exchange registration. Third, they request the CFTC to create a framework that allows regulated entities to use blockchain for trading and settlement. As reported by AMBCrypto, these requests represent a comprehensive approach to addressing the regulatory barriers that currently prevent American users from accessing onchain derivatives markets and encourage innovation to remain offshore.
Despite the regulatory progress, these DeFi exemptions face significant legal challenges from traditional market participants. The Chicago Mercantile Exchange (CME) has already sued the CFTC over its approval of Kalshi's crypto perpetuals, arguing that perpetual contracts should be classified as swaps rather than futures under the Dodd-Frank framework. CME claims the regulator bypassed the legal process required for swap products, prompting the CFTC to reconsider how it defines swaps. Hyperliquid Policy Center founder Jake Chervinsky has called the CME lawsuit anti-competitive and a "shocking misjudgment," while Citadel Securities and traditional exchange bodies have opposed DeFi exemptions, particularly for tokenized asset trading. They argue that regulators should treat every platform as a broker based on its function, not its underlying technology, meaning DeFi platforms handling US tokenized stocks should meet the same disclosure requirements and legal obligations as traditional exchanges.
The filing comes under a friendlier CFTC led by Chairman Michael Selig, who has pushed US crypto regulation toward clearer rules and approved onshore perpetual futures since taking office in December. The organizations contend that tailored regulation would encourage developers to build in the US instead of relocating overseas due to legal uncertainty. As reported by CoinDesk, they argue that onchain infrastructure can improve market transparency, accelerate settlement, and reduce counterparty risk by allowing users to retain control of their assets. The filing credits current Chairman Selig's leadership with working to reverse the trend where developers were left guessing whether they could be treated as operating an unregistered exchange or clearinghouse, pushing many to build offshore. The organizations frame their request as within the CFTC's current authority, stating "This is our answer, and it is within the Commission's own authority to act on." However, with the CLARITY Act still in limbo, traditional players will continue to legally challenge the regulator over such requests, potentially delaying the implementation of these much-needed DeFi exemptions.
