Hyperliquid proposes that the CFTC formally recognizes that on-chain protocols do not require registration and that non-custodial wallets do not act as financial intermediaries

BlockBeats News, July 9th, the Hyperliquid Policy Center (HPC) and Phantom jointly submitted a comment to the U.S. Commodity Futures Trading Commission in response to the CFTC's request for input on whether existing rules are suitable for the evolution of financial technology, proposing to clearly extend the distinction between "building tools" and "operating regulated businesses" to on-chain markets. The comment pointed out that software engineers have been developing matching engines for regulated futures trading platforms for decades, and the CFTC has never considered them as platform operators. However, developers in the digital asset space have long lacked the same clarity, forcing them to choose offshore development. The current CFTC led by Chairman Selig is committed to changing this situation, creating space for innovation in the digital asset and derivatives markets for fintech companies.

The two companies put forward three proposals:

First, to clearly confirm that merely releasing on-chain protocol software itself does not require registration, which often plays a crucial role in engineers' decisions on where to develop;

Second, to provide a clear path for CFTC-registered entities to use on-chain infrastructure to operate regulated functions, allowing trading platforms and clearinghouses to replace decades-old legacy systems with transparent infrastructure;

Third, to convert the recent Phantom no-action letter into formal rules, enabling self-custody wallet providers to avoid individually applying for granted exemptions.

The Hyperliquid Policy Center (HPC) and Phantom emphasized that self-custody and transparent on-chain systems can embed investor protection into the technology itself, while regulated intermediaries retain responsibility for issues that technology cannot independently resolve — this approach will bring the next generation of financial markets within reach of U.S. consumers.