CFTC No-Action Letter Expands to All Passive Software Providers: The Line Drawn by Ten Conditions

On September 17, 2026, the Market Participants Division (MPD) of the U.S. Commodity Futures Trading Commission (CFTC) issued no-action letter CFTC Letter No. 26-25 (Release Number 9300-26), extending CFTC Letter No. 26-09 -- which, as of its March 17, 2026 header date, only a single applicant could rely on -- to all "Passive Software Providers" (PSPs). The position the letter takes is this: subject to ten specified conditions, MPD will not recommend that the Commission take enforcement action against such a provider or its relevant personnel solely because they engage in the "Covered Activities" the letter defines without registering as an introducing broker (IB) or as an IB's associated person (AP).

This article was checked on September 18, 2026, based on this CFTC press release and the full-text PDFs of both no-action letters, Letter 26-25 and Letter 26-09. This site has not used any passive software provider's product, does not test one, and offers no investment or legal advice; the scope, conditions and duration described here follow strictly from the CFTC's own documents as currently published.

What Happened: A Letter One Company Could Rely On Now Extended to Everyone

The press release states that MPD "today announced it has issued a no-action position for the benefit of providers of passive software," and that "the position is similar to that provided in Staff Letter 26-09 and now is broadly available to such providers." The header of Letter 26-25 reads, verbatim, "CFTC Letter No. 26-25 No-Action September 17, 2026," and is signed by DJ Hennes, Director of the Market Participants Division.

Letter 26-09 is headed March 17, 2026, and responds to an application Phantom Technologies, Inc. ("Phantom" in the letter) -- a developer of self-custodial crypto-asset wallet software -- submitted on March 13, 2026. Under Commission Regulation 17 CFR 140.99(a)(2), only the beneficiary of a no-action letter may rely on it, so no provider other than Phantom could rely on that letter. Letter 26-25 states that after it was issued, MPD received inquiries from other similarly situated passive software providers and their counsel seeking a comparable position, and the Division writes that it believes a no-action position for all PSPs on substantially the same terms as Letter 26-09 is warranted.

The Registration Question It Set Out to Resolve

Section 4d(g) of the Commodity Exchange Act makes it unlawful to act as an introducing broker without registering with the Commission as one; Section 4k(1) of the Act and Commission Regulation 3.12(a) impose the same requirement on an introducing broker's associated persons. The Commission has long read "soliciting and accepting" orders broadly, not limited to literally soliciting or accepting a customer's order.

Before this letter, Commission staff had, under appropriate circumstances, issued interpretive letters to certain "Technology Service Vendors" (TSVs) finding that they were not introducing brokers and need not register; but those letters rested on a set of representations made by the vendor, six of which the letter groups together as the "TSV Letter Requirements," the first being that each customer must already have a pre-existing relationship with a futures commission merchant or introducing broker, independent of the vendor. Some of the activities proposed by the Letter 26-09 applicant fell outside those requirements -- the letter's own example is that the registrant and the user need not have a pre-existing relationship -- so the applicant could not rely on the older interpretive letters and had to apply for a new no-action letter instead.

The Line This Letter Draws: What a Passive Software Provider May and May Not Do

Letter 26-25 defines "Covered Activities" to include only what it lists: developing and distributing front-end interface software that lets users view market information, aggregate their positions and view product information, and submit orders directly to a designated contract market or to a registered futures commission merchant or introducing broker, for derivatives contracts including event contracts, perpetual contracts and other Commission-regulated derivatives, with the provider's role limited to providing the software on the user's device and no affirmative involvement in any particular order; contracting with one or more registered entities, which may agree to share a specified portion of related revenue with the provider, and which may also let the provider charge users a transaction-based fee directly, for example through its terms of use; marketing its own service and its relationship with registered entities, including promoting the availability of specific derivatives contracts; referring users to a specific registered entity, provided users remain able to reach that entity directly without going through the provider; and offering the interface either as a standalone product or as a feature embedded in existing wallet software -- in the latter case, the interface must clearly and conspicuously distinguish when a user is engaging in a regulated activity.

The same letter also draws a line the provider may not cross: at no point may it hold, control or take into custody user assets, generate an express buy or sell signal, or exercise discretion over the routing or execution of a user's orders. The Covered Activities carry structural limits too: users may trade only on a designated contract market, either directly as a member of that market or indirectly as a customer of a futures commission merchant or introducing broker that is a member of it, and the funds or other property securing a position must be held at that market's clearing organization and/or a clearing member futures commission merchant of that clearing organization -- what the letter calls a "custodial" trading model consistent with the structure of existing on-exchange derivatives markets. A footnote also expressly rules out reading this as crypto-specific: passive software providers are not limited to those offering crypto-asset-related software.

Which of the Ten Conditions Matter Most to an Ordinary User

A provider must disclose to each user its relationship with the relevant registered entities and any potential conflicts of interest, including fees, and obtain the user's acknowledgment of receipt; it must provide the risk disclosures covered by the Commission Regulation 1.55(b) risk disclosure statement, to the extent relevant to the trading activity the software facilitates, and retain a record of the user's acknowledgment -- except that this condition does not apply where the registered entity is itself registered and already obligated under Regulation 1.55 to provide the user the same risk disclosure statement; and users must open their accounts as a direct member of a designated contract market, or as a customer of a futures commission merchant or introducing broker, and must continue to be able to access the underlying registered entity directly, without going through the provider.

The rest lean toward compliance process: absent a waiver by the Division, the provider, its principals and anyone involved in soliciting users must not be subject to statutory disqualification, and must notify the Division promptly if that changes; the provider must sign a written undertaking with each registered entity it works with, accepting joint and several liability if the provider or its personnel violate the Commodity Exchange Act or Commission regulations while engaged in Covered Activities, and agreeing to submit to the Commission's investigative and enforcement jurisdiction, with the undertaking filed with the Division; the provider must adopt and enforce policies and procedures reasonably designed to ensure that its external communications and marketing comply with the Commission and National Futures Association rules that apply to a registered introducing broker, and must not engage in advertising or promotion that would require the Association's prior approval if the provider were registered; the provider must keep records of its compliance and regulated business under Commission Regulation 1.31, and must notify the Division if it becomes insolvent or enters bankruptcy proceedings; and the tenth condition is that the provider files a notice with the Division agreeing to satisfy these conditions and consenting to the Commission's jurisdiction.

How to Read a Headline Like "The U.S. Just Gave the Green Light"

On seeing a headline like "U.S. regulator green-lights crypto wallet trading," separate the levels of the document first: a rule the Commission adopts and a division-level "no-action letter" are not the same thing. Letter 26-25 closes with three statements: that the letter and the position it takes represent the views of the Division only and do not necessarily represent the views of the Commission or any other office or division; that the letter and the no-action position it takes do not bind the Commission; and that the position rests on the facts and circumstances presented to Division staff, and that any different, changed or omitted material fact could render it unavailable. The letter also states that, as with all staff letters, the Division retains the authority to further condition, modify, suspend, terminate or otherwise restrict the position, in its discretion.

The boundary the letter itself draws is not a date either, but a condition: it applies "until the effective date of a Commission rulemaking or guidance addressing the application of the IB registration requirement to software developers." On March 23, 2026, a joint interpretive release from the U.S. Securities and Exchange Commission and the CFTC, addressing how the federal securities laws apply to certain types of crypto assets and related transactions, was published in the Federal Register -- a Commission-level joint document that took effect the day it was published. Letter 26-25 deals with a different question -- whether a software developer offering an order-entry interface must register as an introducing broker -- and is a division-level no-action letter, different in both nature and binding force.

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