Crypto applications seeking to give users access to regulated derivatives markets received new guidance Thursday from the Commodity Futures Trading Commission, which said certain software providers can connect users to registered trading venues without registering as brokers.

In a no-action letter, the agency's Market Participants Division said passive software providers can avoid registering as introducing brokers if they limit their role to front-end software and meet a list of conditions. No-action relief is staff-level enforcement discretion rather than a formal rule change, so it applies only on the letter's stated terms. The position covers software that gives users access to event contracts, which settle based on the outcome of real-world events, and perpetual contracts, which carry no expiration date, along with other regulated derivatives.

The guidance could prove significant for wallet developers and trading apps, because registering as an introducing broker—a category subject to CFTC registration, disclosure, and supervision rules—can bring substantial compliance requirements. The letter offers them a path to connect users to registered derivatives markets without acting as the intermediary that handles the trade. In practice, that would let an app remain the front end to derivatives trading while a registered entity executes the trade.

"The Division believes that a no-action position for all [passive software providers] on substantially the same terms as that provided to the software developer in Letter 26-09 is warranted," the CFTC letter said.

The covered software can let users view market data, product offerings, and position information, and submit orders for CFTC-regulated derivatives—including event contracts and perpetual contracts—directly to registered entities. The position extends relief first granted in March to Phantom Technologies, whose self-custody wallet was cleared to connect users to regulated derivatives markets without registering as a broker. What was a one-off accommodation in March is now a framework available to any passive software provider that signs on to the same terms.

Under Thursday's letter, CFTC staff will not recommend enforcement against passive software providers, or their relevant personnel, for failing to register as introducing brokers or associated persons, provided they stay within the covered activities and meet the letter's conditions. Those conditions include user disclosures about relationships with registered entities, conflicts, and fees; marketing policies; recordkeeping; insolvency or bankruptcy notices; and a filing agreeing to the terms.

Industry advocates framed the letter as providing much-needed clarity for developers building tools that connect users to regulated derivatives markets.

"Clarity from the CFTC!" Digital Chamber CEO Cody Carbone wrote on X. "Software providers that build tools connecting users to registered FCMs/DCMs no longer have to register as brokers just for building the interface. This removes a major regulatory ambiguity that's chilled software innovation in derivatives markets."

Blockchain Association CEO Summer Mersinger echoed that view, saying the staff action provides "important clarity."

"By extending its previous no-action relief to similarly situated passive software providers, the CFTC's Market Participants Division is taking a more functional approach to regulation—one that looks at what a technology provider actually does rather than treating software itself as a traditional financial intermediary," Mersinger said.

The CFTC action came the same day the SEC unveiled an "Innovation Exemption" for tokenized U.S. stocks. Both moves followed the Senate's failed vote to advance the Digital Asset Marketarity Act, which would have created a federal market-structure framework for digital assets and clarified the roles of the CFTC and SEC.

With the bill stalled, those agency-directed efforts now become the operative path for federal digital asset market-structure rules. CFTC Chair Michael Selig directed staff in August to explore crypto market-structure rules if Congress did not pass the Clarity Act, including rules for crypto exchanges, leveraged trading, and on-chain finance protocols. SEC Chair Paul Atkins said in July that the SEC was prepared to write crypto rules if the legislation stalled.

Coinbase Vice Chairman Ryan VanGrack described the two agencies' actions as arriving "gradually, then suddenly" after years of regulatory standstill.

"After years of regulatory standstill, we just saw meaningful relief in a matter of hours: SEC Innovation Exemption and CFTC No-Action Relief," VanGrack wrote on X. "The tide has officially turned."