Hyperliquid and Phantom Urge CFTC to Protect Onchain Developers

Three asks, one regulator

The joint filing centers on three specific requests submitted in response to a CFTC request for information on fintech regulation:

• Developer exemption. Confirm that blockchain protocol developers do not trigger registration obligations solely for creating onchain software.
• Infrastructure guidance. Issue explicit guidance permitting registered derivatives exchanges, clearinghouses, and intermediaries to use onchain infrastructure for execution, clearing, settlement, margining, and recordkeeping under existing rules.
• Wallet codification. Codify exemptions that prevent non-custodial wallet providers from being classified as introducing brokers.

The underlying argument: existing CFTC regulations were designed for custodial intermediaries that hold customer assets and execute trades. Onchain protocols operate under different mechanics — users transact directly without a counterparty controlling funds. Applying identical registration requirements to open-source developers, the filing contends, produces compliance friction without a corresponding market-integrity benefit.

Structural friction below the surface

The filing lands inside an active dispute between decentralized platforms and incumbent exchange operators. In May, Intercontinental Exchange and CME Group reportedly urged regulators to scrutinize Hyperliquid's expansion into commodity-linked perpetual futures, citing manipulation risk in energy derivatives. Two weeks later, ICE CEO Jeffrey Sprecher publicly called for a "level playing field" allowing regulated venues to offer 24/7 onchain perpetual futures, and disclosed exploratory discussions with Hyperliquid.

CME has continued expanding regulated crypto derivatives — launching futures tied to Avalanche and Sui, CFTC-regulated Bitcoin volatility futures, and the Nasdaq CME Crypto Index futures tracking seven digital assets. In June, CME sued the CFTC over the agency's approval of crypto perpetual futures, arguing the regulator exceeded its authority under the Commodity Exchange Act.

The competing positions frame the regulatory question sharply: incumbents want boundary enforcement, Hyperliquid and Phantom want perimeter recalibration. Both sides invoke market integrity.

What to track

• CFTC response window. The agency has not indicated a timeline for guidance. Prior RFI cycles have produced responses over multi-month horizons.
• Scope of any exemption. A narrow developer-only carve-out leaves wallet providers and onchain settlement layers untouched. A broader interpretation reshapes venue access.
• NFT marketplace exposure. Platforms that route trades through onchain liquidity or settle via smart contracts face the clearest compliance delta if guidance codifies permission for regulated intermediaries to use the same rails.

The data indicates a convergence point: regulated intermediaries and decentralized venues are now formally requesting shared infrastructure rules. Until the CFTC clarifies its position, marketplace operators holding tokenized inventory or routing derivative exposure should treat regulatory status as an unresolved input rather than a settled cost.