Hyperliquid Policy Center and Phantom have jointly submitted a regulatory petition to the CFTC (Commodity Futures Trading Commission) arguing that on-chain protocol developers should not be automatically classified as regulated financial intermediaries. The two firms contend that publishing blockchain software code should not trigger mandatory registration requirements, and that non-custodial wallet providers like Phantom should not be deemed financial intermediaries merely for enabling on-chain transactions.
The petition addresses a critical regulatory gap in how U.S. authorities treat decentralized finance infrastructure. The companies argue that regulators must distinguish between those who actually provide financial services—such as regulated exchanges and clearing firms seeking to operate on blockchain rails—and those who simply develop protocol code and build underlying infrastructure. Phantom specifically emphasized that its non-custodial wallet model does not involve holding or controlling user funds, and therefore should not trigger financial intermediary classification.
The filing represents a coordinated push from major DeFi players to establish clearer regulatory pathways for blockchain infrastructure providers. By separating code publication from service provision, Hyperliquid and Phantom aim to create space for innovation while allowing legitimately regulated entities a clear route to blockchain integration. The petition directly challenges the CFTC's current approach of applying traditional regulatory frameworks to decentralized protocols, a stance that has created uncertainty for developers operating in the DeFi ecosystem.