CFTC extends crypto software broker exemption as CLARITY Act stalls
The CFTCs Market Participants Division has extended no-action relief to providers of passive crypto-trading software, sparing them from registering as brokers, two days after the Senate blocked the CLARITY Act. The relief is set out in CFTC Staff Letter 26-25, signed by division director DJ Hennes. Division staff said they will not recommend enforcement against eligible software providers that fail to register as introducing brokers, nor against their personnel for not registering as associated persons of an introducing broker. The same treatment was given to a single company, Phantom Technologies, in March. However, that position bound only Phantom. Other developers that wanted the same cover had to file their own respective requests. What the latest CFTC Staff Letter 26-25 does is lift that limit, offering the relief on substantially the same terms to any passive software provider that meets the conditions. Where the line falls between software and broker The relief only reaches software that passively connects users to regulated markets. A provider can build and hand out interfaces that let users check market data, review products, and send orders straight to registered venues. It can also bundle that into a self-custodial wallet. The cover disappears when brokerage enters into the picture. Under the conditions, a









