CFTC Proposes to Formalize Rule to Ensure Unhosted Software Developers' Protection

BlockBeats News, May 6th, at the Consensus Miami conference, Michael Selig, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated that they are planning to formalize a friendly stance towards non-custodial software developers into official rules. In March, CFTC had already issued a no-action letter to the crypto wallet provider Phantom, clearly stating that self-custodial wallet software developers meeting specific conditions do not need to register as brokers. Compared to temporary guidance, CFTC prefers to promptly establish regulatory positions through formal rule-making to provide clear guidance to U.S. developers and promote the development and launch of related software.

This move echoes similar guidance issued by the SEC last month—the SEC pointed out that interfaces such as DeFi wallets are generally not considered brokers. Currently, both regulatory agencies are working to clarify their regulatory stance on software developers, which is beneficial for the development of non-custodial wallets and DeFi tools in the United States.