Woofun AI reports that Hyperliquid and Phantom have jointly submitted a comment letter to the U.S. Commodity Futures Trading Commission (CFTC), advocating for regulatory updates regarding on-chain trading infrastructure. The entities contend that existing CFTC regulations are tailored for traditional financial systems reliant on centralized intermediaries and are ill-suited for decentralized finance. They propose clarifying that developing software for on-chain trading protocols does not mandate registration as an exchange or clearing agency, and that non-custodial wallet front-ends should be exempt from registering as introducing brokers.

Additionally, they suggest permitting regulated institutions to utilize blockchain for trading and clearing operations. This submission follows a June request for comment issued jointly by the CFTC and the U.S. SEC seeking industry input on regulations impacting financial innovation.