The Commodity Futures Trading Commission (CFTC) has offered conditional registration relief to developers of passive software used in regulated derivatives trading.
Under Staff Letter 26-25, published by the CFTC’s Market Participants Division on 17 September, staff will not recommend enforcement against qualifying providers for failing to register as introducing brokers or associated persons of introducing brokers.
The relief applies when software connects users to registered futures commission merchants, introducing brokers or designated contract markets. Users must remain customers or direct members of the regulated firm handling their transactions, rather than becoming customers of the software provider.
Developers must satisfy 10 conditions. These include filing a notice with the Market Participants Division, accepting the CFTC’s jurisdiction to investigate and enforce breaches, and ensuring that neither the provider nor relevant personnel are subject to statutory disqualification.
Customers must be able to contact the registered exchange or intermediary without using the developer’s software. Providers are also restricted from publishing promotional material that would require advance approval from the National Futures Association if they were registered as introducing brokers.
The position is not a formal exemption from the Commodity Exchange Act. It means only that the division will not recommend enforcement over specified registration failures, and does not alter the law or bind other CFTC divisions as a Commission rule would.
Although the decision has been described as relief for crypto developers, it applies more broadly to passive software used in regulated derivatives markets. Wallet and digital-asset companies may qualify when their tools connect users to eligible products, but the letter does not give blanket protection to every crypto application.
The arrangement follows Staff Letter 26-09, which addressed software providing access to regulated derivatives while registered firms retained trade execution, customer accounts and control of assets.
The relief will continue until a Commission rule or guidance takes effect on how introducing-broker requirements apply to the covered activity. Introducing brokers generally solicit or accept orders involving futures, commodity options, swaps or certain retail commodity transactions without holding customer funds.
Developers must remain within the passive model. Taking custody of customer assets, recommending trades, issuing explicit buy or sell signals or acting as the customer-facing intermediary could fall outside the letter. Fraud, manipulation, unlawful solicitation and other breaches remain subject to enforcement.
The CFTC announcement came as the Securities and Exchange Commission issued a separate five-year exemption for eligible venues offering tokenized National Market System stocks. Covered venues may use permissioned automated market makers and liquidity pools, but tokenized shares must provide the same rights as the underlying stocks. Synthetic products tracking prices do not qualify.
Both actions followed the Senate’s failure to advance the Digital Asset Market CLARITY Act. Senators rejected cloture on 15 September by 50-49, 10 votes short of the 60 required. Seven Senate Democrats who opposed the motion have reopened negotiations, with no second procedural vote scheduled.
Separately, the House Ways and Means Committee advanced the Digital Asset Tax Certainty Act by 38-5 on 16 September. It covers staking rewards, digital-asset lending, wash-sale rules, dealer treatment and a proposed exemption of up to $10 for certain network and transaction fees.
