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Phantom and Hyperliquid Push CFTC to Update Crypto Derivatives Rules

Summarized from Cointelegraph Originally published 2026-07-09 Summary published 2026-07-10

Two crypto firms are urging the CFTC to carve out exemptions for blockchain developers and non-custodial wallet providers from legacy finance rules.

Two prominent players in the decentralized finance ecosystem — Phantom, a widely used non-custodial crypto wallet, and Hyperliquid, a blockchain-based derivatives platform — have formally called on the Commodity Futures Trading Commission to modernize its regulatory framework to account for the unique architecture of onchain financial products. Their core argument is that rules built around traditional financial intermediaries simply do not translate to software-driven, permissionless infrastructure.

At the heart of the request is a push for the CFTC to exempt blockchain developers and non-custodial wallet providers from compliance requirements that were designed with centralized brokers and clearinghouses in mind. Non-custodial wallets, by definition, never hold user funds — a structural difference that the firms argue makes applying intermediary-focused regulations not just burdensome, but technically inapplicable.

The appeal reflects a broader tension that has been building between legacy financial regulators and the fast-moving DeFi sector. Regulatory frameworks written decades before distributed ledgers existed struggle to map cleanly onto smart contracts and self-executing protocols. When enforcement categories don't fit the technology, the risk is either regulatory overreach that chills innovation or a compliance vacuum that leaves consumers unprotected — neither outcome serving the public interest.

By engaging the CFTC directly, Phantom and Hyperliquid are signaling a preference for regulatory dialogue over the confrontational posture that has characterized parts of the crypto industry's relationship with Washington in recent years. Whether the agency responds with formal rulemaking, guidance, or continued silence will be closely watched as a bellwether for how the US intends to govern the next generation of derivatives markets operating entirely onchain.

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About this article

This is an AI-assisted editorial summary of reporting first published by Cointelegraph. All facts, quotes, and reporting are attributed to the original publisher; any errors of summarization are ours alone. Please visit the original source for the complete, authoritative version.

Original title: “Phantom, Hyperliquid ask CFTC to modernize rules for onchain derivatives”
Source: Cointelegraph
First published: 2026-07-09
Original URL: https://cointelegraph.com/news/phantom-hyperliquid-ask-cftc-to-modernize-rules-for-onchain-derivatives?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound

Read the full article at Cointelegraph

Frequently Asked Questions

Q.What are Phantom and Hyperliquid asking the CFTC to do?

They are urging the CFTC to exempt blockchain developers and non-custodial wallet providers from regulatory requirements that were designed for traditional financial intermediaries, arguing those rules don't fit the structure of onchain products.

Q.Why should non-custodial wallet providers be treated differently by regulators?

Non-custodial wallets never hold user funds directly, which means the intermediary-focused compliance requirements the CFTC typically applies are structurally mismatched with how these tools actually work.

Q.What is Hyperliquid?

Hyperliquid is a blockchain-based derivatives platform that operates onchain, and along with Phantom has formally engaged the CFTC to modernize rules governing this category of financial products.

Phantom and Hyperliquid Push CFTC to Update Crypto Derivatives Rules

Frequently Asked Questions

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