On September 17, 2026, the CFTC's Market Participants Division issued Staff Letter 26-25, letting wallets and apps that route Bitcoin (BTC) and Ether (ETH) derivatives orders skip introducing-broker registration under ten conditions. It came two days after the Senate's CLARITY Act cloture vote failed 49 to 50 on September 15, 2026.
Why did the CFTC exempt software providers from broker rules?
| Date | What happened | Market effect |
|---|---|---|
| Mar 2026 | CFTC grants Phantom-specific IB no-action relief | One wallet shielded, no broader framework |
| Sep 15, 2026 | CLARITY Act cloture fails 49-50 in the Senate | Legislative path to crypto rules stalls |
| Sep 16, 2026 | SEC, CFTC chairs vow to act without Congress | Industry expects unilateral agency rules |
| Sep 17, 2026 | CFTC Letter 26-25 broadens relief to all PSPs | Wallets, apps can route derivatives orders |
Letter 26-25, signed by Market Participants Division Director DJ Hennes, extends relief first granted only to the Solana wallet Phantom in March 2026 to any qualifying "Passive Software Provider." A PSP can build front-end software that lets users view CFTC-regulated derivatives, including futures, perpetuals and event contracts, and submit orders to registered futures commission merchants and designated contract markets, and it can collect transaction fees, without registering as an introducing broker. The letter's ten conditions require the provider to avoid holding customer assets, avoid generating buy or sell signals, adopt compliance policies "as if the PSP were registered as an IB," and file a joint liability undertaking with the registered intermediary it routes orders to.
The Block reports the CFTC action landed the same day the SEC issued its own tokenized-stock exemption, both agencies moving on their existing authority after Congress could not. Cryptopolitan reports CFTC Chair Michael Selig framed the letter as proof the agency will act "using our existing statutory authorities" regardless of the Senate outcome.
Where analysts disagree
Industry executives call the letter durable, usable relief. Phantom CEO Brandon Millman said, according to PYMNTS, "this is how it should work: software built to protect consumers, paired with regulated partners." Coinbase Vice Chair Ryan VanGrack told PYMNTS that "after years of regulatory standstill, we just saw meaningful relief." Digital Chamber CEO Cody Carbone and Blockchain Association CEO Summer Mersinger both praised the move as removing regulatory ambiguity for builders, as reported by NewsCord's roundup of reactions.
The letter's own text, and legal reporting on it, cut that relief down to size. Crypto.news notes the position "does not change the law or bind other divisions in the same manner as a Commission rule," and that a future rulemaking could replace it outright. AMBCrypto reports the relief covers only introducing-broker registration status and does not bind the Justice Department, so a developer facing money-laundering or unlicensed money-transmission charges, the kind Tornado Cash developer Roman Storm faced, gets no shelter from it. Both readings agree on the facts; they disagree on whether narrow, revocable staff relief is a meaningful floor for builders or a limited patch that leaves the larger legal exposure untouched.
Why it matters
A no-action letter is enforcement discretion by one CFTC division, not a Commission rule and not a statute. It lowers one specific barrier, introducing-broker registration, for wallets and trading apps that want to route orders into CFTC-regulated derivatives markets without taking custody of user funds. That widens the number of software products that can legally offer access to regulated Bitcoin and Ether derivatives, which affects how retail traders and automated bots reach those markets. It does not touch money-transmission law, sanctions compliance or Justice Department authority, so the legal risk map for crypto developers narrows on one axis only. Because Letter 26-25 replaces itself the moment the CFTC finalizes formal introducing-broker rulemaking, it is explicitly a placeholder, not the destination.
What to watch
The CFTC has not set a date for turning Letter 26-25 into a formal rule; that filing, when it appears, would show whether the ten conditions survive rulemaking intact. Watch whether wallets beyond Phantom start filing notices with the Market Participants Division under the letter's terms. Watch whether the Justice Department or FinCEN test the boundary the letter leaves open, since AMBCrypto's reporting shows registration relief and criminal exposure are separate questions. And watch Senator Thom Tillis's motion to reconsider the CLARITY Act, since a renewed cloture vote would be the one path to converting this patchwork of exemptions into statute.
Bottom line
- The CFTC's Market Participants Division issued Staff Letter 26-25 on September 17, 2026, exempting Passive Software Providers from introducing-broker registration under ten conditions.
- The letter broadens relief first granted only to Phantom in March 2026 into a general framework, two days after the Senate's CLARITY Act cloture vote failed 49 to 50 on September 15, 2026.
- Industry figures including Phantom's Brandon Millman and Coinbase's Ryan VanGrack call it meaningful relief; the letter's text and legal reporting note it does not bind the Justice Department or money-transmission law.
- As staff guidance rather than a Commission rule, the relief can be superseded the moment the CFTC finalizes formal introducing-broker rulemaking.
Research and analysis only. Nothing here is financial advice or a recommendation to trade. Markets carry risk; decisions are your own.