The Commodity Futures Trading Commission has cleared the way for consumer crypto apps to offer regulated derivatives trading. In a no-action letter issued September 17, the agency’s Market Participants Division said it will not recommend enforcement against passive software providers that connect users to registered derivatives exchanges, even though those providers are not registered as brokers. The letter, numbered Staff Letter 26-25, covers software that gives users access to futures, perpetual contracts and event contracts on CFTC-registered venues. Execution still happens on the exchange. What changed is who is allowed to stand between the user and that exchange.
The practical change is narrow but significant. A self-custody wallet or trading app can now display derivatives markets, let users view prices and route orders, while the actual execution stays on a registered venue. Until now, facilitators in that position generally had to register as introducing brokers or associated persons, a process with compliance costs heavy enough that most consumer crypto apps simply stayed away from derivatives entirely. That left a gap between simple spot trading in wallets and full futures platforms, and offshore venues filled it for users willing to take the counterparty risk. The new letter gives American apps a domestic path to the same products, under supervision.
Conditions attached
The relief is not unconditional. Providers must disclose their relationships with registered entities, potential conflicts and fee arrangements to users. They need marketing policies, recordkeeping practices, insolvency and bankruptcy notices, and a filing agreeing to the terms of the letter. Staff will not recommend enforcement only while the provider stays within the covered activities and meets those conditions. Step outside them and the ordinary registration requirements apply again. The agency was explicit that the letter binds staff conduct, not the commission itself, and that it can be withdrawn. Providers also cannot take part in trading themselves. The software has to stay passive, which is the line the CFTC drew between a front end and a broker.
The position extends relief the CFTC first granted in March to Phantom Technologies, whose self-custody wallet was cleared to connect users to regulated derivatives markets under the same passive-software logic. Thursday’s letter generalizes that treatment to other providers willing to accept the same terms. In effect, Phantom served as the test case, and the terms that worked for it are now available to the wider market. Wallet makers that spent the past year building spot features can add derivatives screens without forming a broker-dealer subsidiary.
Coinbase executives framed the shift as sudden after a long freeze. Ryan VanGrack, the company’s vice chairman, wrote on X: “After years of regulatory standstill, we just saw meaningful relief in a matter of hours: SEC Innovation Exemption and CFTC No-Action Relief. The tide has officially turned.” Coinbase has separately filed with the CFTC to launch single-stock perpetual futures, so the timing of the letter matters for more than wallets.
Under the letter, staff will not recommend enforcement against passive software providers, or their personnel, for failing to register as introducing brokers if they stay within the covered activities and meet the letter’s conditions.
The move fits a pattern that emerged after the Senate failed on September 15 to advance the Clarity Act, the crypto market structure bill that needed 60 votes to proceed. CFTC Chair Michael Selig had already directed staff in August to prepare market structure rules in case Congress did not act, covering exchanges, leveraged trading and on-chain finance protocols. SEC Chair Paul Atkins said in July that his agency was ready to write crypto rules on its own if the legislation stalled. Both agencies are now doing exactly that, and doing it within days of each other.
On the same day as the no-action letter, the SEC introduced its Innovation Exemption, which allows limited distribution of tokenized stocks for five years subject to volume caps and an issuer veto. Between them, the two agencies are filling the space left by the stalled bill with their own rules. Prediction markets have noticed the change in approach: odds that the Clarity Act passes in 2026 have fallen to roughly 14 percent, from 82 percent in February, according to tracking cited by Decrypt. Traders read that decline as a sign that unilateral regulation is now the base case.
The CFTC has also moved its own market structure proposal into White House regulatory review, a step that preceded bitcoin’s 5 percent jump back above $80,000 on September 18, its first time above that level since September 7. The market read the sequence the same way traders read the Fed: enforcement posture is easing even without new statutes. ETF flows supported that reading, with $433 million returning to spot bitcoin funds on September 18 after midweek outflows of $746 million tied to the Federal Reserve’s first rate hike in three years.
The split between agency action and legislation carries its own risks. No-action letters and exemptions can be revoked by a change in leadership or a court challenge, which is precisely why the industry spent years pushing for the Clarity Act in the first place. A statutory framework would survive administrations. Letters do not. Legal teams at several firms are likely to keep two files open: one for the current relief, one for the scenario where it disappears. That is the cost of regulating by letter instead of law.
There is also a question of scope. The letter covers connecting users to registered exchanges. It does not address decentralized protocols that match trades on-chain without any registered venue, which Selig’s August directive listed as a separate workstream. Apps built on automated market makers or on-chain order books get no protection from this letter, and the CFTC has not said when or whether it will extend relief to them.
For users, the immediate effect will show up gradually as wallets and apps decide whether to accept the letter’s conditions and plug into registered exchanges. For the industry, the message is that regulators are no longer waiting for Congress. The terms of each relief document, not legislation, now define what crypto products can reach American users.