Haynes Boone Derivatives Practice Group Co-Chair Brian Sung spoke with Law.com after the Commodity Futures Trading Commission’s Market Participants Division issued a no action letter providing what Chairman Michael Selig described as “long overdue clarity” for non-custodial digital asset wallet software providers, granting Phantom Technologies Inc. relief from Introducing Broker registration requirements in connection with its non-custodial front end interface connecting users to registered derivatives platforms.
Sung observed that many firms are exploring ways to enter the prediction markets space—either by registering new entities or acquiring existing ones with the necessary licenses—and see technology service arrangements like this as a "less regulation intensive path" into the market.
"[Letter 26-09] gives more clarification as to what activities are permitted, what kinds of compliance steps may be required and what the CFTC is expecting of companies that go this technological service pathway," Sung said. "So it’s helpful to get that clarity."
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