HPC and Phantom urge CFTC to modernize DeFi rules

HPC and Phantom urge the CFTC to modernize DeFi rules, arguing onchain software developers shouldn't be regulated as intermediaries and calling for clear paths for onchain market infrastructure.

The Hyperliquid Policy Center (HPC) and Phantom have jointly submitted comments to the US Commodity Futures Trading Commission (CFTC), urging the agency to modernize its regulatory approach for decentralized finance (DeFi) and onchain market infrastructure. They argue that current CFTC rules, designed for traditional financial systems with centralized intermediaries, are not suitable for decentralized markets where users retain control of their assets. The organizations stress that developing or publishing onchain protocol software should not automatically require registration as an exchange or clearinghouse, distinguishing software development from regulated financial services. Additionally, HPC and Phantom call for the CFTC to formalize its no-action relief for non-custodial wallet providers like Phantom and to establish clear pathways for registered exchanges and clearinghouses to adopt onchain infrastructure. Their proposals include a three-step roadmap for integrating onchain markets under CFTC oversight, advocating for rules that reflect the unique nature of decentralized technologies.