The US CFTC exempts "passive software" providers from broker registration if they never hold user assets, expanding crypto and prediction market online trading (Lydia Beyoud/Bloomberg)

The US Commodity Futures Trading Commission (CFTC) has exempted "passive software" providers from broker registration if they never hold user assets. This move expands online trading of crypto and prediction markets. According to Cointelegraph, providers must meet conditions limiting their role in transactions, including restrictions on exercising discretion over users' orders.

The exemption, reported by Investing.com, allows software providers partnering with regulated entities to avoid enforcement penalties for failing to register as brokers. This guidance builds on a March no-action letter granted to Phantom Technologies Inc., which partnered with Kalshi to offer predictions trading to its over 20 million crypto wallet holders. Brandon Millman, CEO of Phantom, stated that the company established a foundation for platforms that do not take custody of user assets or make trading decisions.

The CFTC's move, also noted by Techmeme, is expected to make it easier for crypto wallets and other apps to offer access to regulated derivatives and prediction markets without registering as introducing brokers. The Block also reported that software developers who build crypto trading tools have received some breathing room from the CFTC.

Brief written by urgent.news from Techmeme, Cointelegraph, Investing.com, The Block — 4 reports on this story. Machine-written — may contain errors; check the original before relying on it.