Phantom and Hyperliquid push CFTC to rethink rules for blockchain derivatives
The tl;dr
Two major crypto platforms, Phantom and Hyperliquid, are asking US financial regulators to update outdated rules that treat blockchain-based derivatives protocols the same as traditional brokers and exchanges. They want exemptions for blockchain developers and non-custodial wallet providers that don't fit the traditional financial intermediary model.
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30-day · delayedKey points
- Phantom and Hyperliquid filed feedback with the CFTC arguing that onchain derivatives platforms operate fundamentally differently from traditional exchanges and brokers and should not be regulated the same way.
- The companies specifically requested exemptions for blockchain developers and non-custodial wallet providers, which custody user assets less directly than traditional financial firms do.
- The CFTC and SEC issued a joint Request for Information in mid-June on financial innovation, which provided the opening for these submissions.
- Current regulations treat decentralized or onchain protocols under rules designed for centralized intermediaries, creating regulatory friction for blockchain-native financial infrastructure.
Phantom and Hyperliquid, two prominent cryptocurrency platforms, are pushing US financial regulators to modernize their rulebook for onchain derivatives. The companies submitted feedback to the Commodity Futures Trading Commission (CFTC) arguing that blockchain-based trading protocols should not be regulated under the same framework designed for traditional brokers and exchanges.
The core complaint centers on regulatory mismatch. Onchain protocols typically work differently than centralized intermediaries: they may operate through smart contracts, allow non-custodial transactions where users control their own assets, and lack the centralized infrastructure that traditional brokers maintain. Yet they are currently regulated as if they were traditional financial firms, creating compliance burdens that don’t fit their architecture.
The platforms specifically requested exemptions for blockchain developers and non-custodial wallet providers. This timing follows a mid-June joint Request for Information from the CFTC and Securities and Exchange Commission on financial innovation, which opened a public comment period. The regulatory push reflects growing recognition that crypto infrastructure operates on different principles, though how strictly the CFTC applies existing rules remains unsettled.
How the CFTC responds will shape whether crypto derivatives can operate smoothly under clear rules or face regulatory uncertainty that stifles innovation in decentralized finance.
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Topics
- hyperliquid
- phantom
- cftc
- derivatives
- regulation
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