The Hyperliquid Policy Center (HPC) and non-custodial wallet provider Phantom have jointly urged the US Commodity Futures Trading Commission (CFTC) to modernize its regulatory approach to decentralized finance (DeFi). In a response to the agency’s Request for Information on evolving financial technology, the organizations argue that onchain infrastructure should not be regulated like traditional financial intermediaries.
The filing could influence how US regulators oversee decentralized markets while shaping the future of self-custody, onchain trading, and blockchain innovation.
HPC and Phantom Push for Tailored DeFi Rules
In their joint comment, HPC and Phantom argue that developers who publish onchain protocol software should not automatically be treated as operators of exchanges or clearinghouses. Instead, they urge the CFTC to distinguish between building technology and providing regulated financial services.
The filing compares blockchain developers to software engineers who build trading systems for traditional exchanges but are not themselves regulated as financial intermediaries.
The organizations also call on the CFTC to create a clear pathway for registered exchanges and clearinghouses to adopt onchain infrastructure while continuing to meet their regulatory obligations.
Self-Custody Takes Center Stage
Another key recommendation focuses on non-custodial wallets. HPC and Phantom argue that wallet providers do not hold customer assets or execute trades on users’ behalf, meaning they should not be regulated as financial intermediaries.
The filing also asks the CFTC to formalize its recent no-action relief for Phantom through rulemaking, providing broader legal certainty for other self-custody wallet providers operating in the United States.
Why the Filing Matters
The organizations contend that tailored regulation would encourage developers to build in the US instead of relocating overseas due to legal uncertainty. They also argue that onchain infrastructure can improve market transparency, accelerate settlement, and reduce counterparty risk by allowing users to retain control of their assets.
If adopted, the proposals could pave the way for broader institutional adoption of blockchain infrastructure while preserving regulatory oversight where financial intermediaries remain involved.
The CFTC will review industry feedback submitted through its Request for Information before determining whether to issue formal guidance or pursue rulemaking. Any future policy changes could have significant implications for DeFi protocols, self-custody wallets, and the broader digital asset market as US regulators continue refining their approach to blockchain-based financial infrastructure.
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