The US Commodity Futures Trading Commission (CFTC) has issued a letter stating that it will not process transactions for the Phantom cryptocurrency wallet.
The CFTC has stated that it will not pursue legal action against Phantom because its cryptocurrency wallet software allows users to directly manage their own private keys and assets.
“CFTC staff decided against taking any action against the provider of cryptocurrency wallet software with self-custody capabilities…”
On the other hand, the CFTC will not require the Phantom cryptocurrency wallet to have registration for personal custody.
This decision shows that the CFTC does not consider self-custodial wallet services, where users directly manage their private keys and assets, as traditional financial intermediaries or brokers.
This is because platforms that facilitate transactions in derivatives markets are normally required to register with the CFTC as brokers or intermediaries.
Consequently, Phantom can likely continue offering its services without going through complex broker registration procedures or fulfilling relevant regulatory compliance obligations.
*This is not investment advice.