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CFTC Issues No-Action Relief to Phantom Technologies, Inc.

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Today, the Market Participants Division (MPD) of the Commodity Futures Trading Commission (CFTC) issued a No-Action Letter to...

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Today, the Market Participants Division (MPD) of the Commodity Futures Trading Commission (CFTC) issued a No-Action Letter to Phantom Technologies, Inc. (Phantom), a developer and distributor of self-custodial digital asset wallet software applications, taking the position that it will not recommend an enforcement action against Phantom for failure to register as an introducing broker (IB) or for its personnel failing to register as associated persons (APs) of an IB.The No-Action Letter notes that Phantom is proposing to expand its services to act as a technology service vendor (TSV) to designated contract markets (DCMs), futures commission merchants (FCMs), and IBs (collectively, “collaborators”) by developing, providing, and maintaining front-end interface software through which users of DCMs and customers of FCMs or IBs can access derivatives trading. The No-Action Letter emphasizes that Phantom’s software would serve only to passively enable users to transact in derivatives products through registered DCMs, FCMs, and IBs and that at no point would Phantom hold, control, or take into custody user assets, generate express “buy” or “sell” signals, or exercise discretion with respect to the routing or execution of user orders.The No-Action Letter contains several conditions that Phantom must satisfy, including entering into, and filing with the CFTC, an agreement with collaborators that it will be jointly and severally liable for any violation of the Commodity Exchange Act (CEA) and CFTC rules by Phantom or its personnel when conducting its proposed activities and subjecting itself to the CFTC’s jurisdiction for any related enforcement action. Phantom will also have to provide conflicts of interest and risk-related disclosures to users, maintain policies and procedures relating to public communications and marketing, abstain from engaging in certain types of advertisements and promotions, notify the CFTC if it becomes insolvent or enters a bankruptcy proceeding, and maintain records demonstrating compliance with these conditions and CFTC-regulated activities, among others.

CFTC Issues No-Action Relief to Phantom Technologies, Inc.

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Ryne Miller is a partner in the firm’s Financial Services Group, advising global trading and markets businesses, financial institutions, and fintech companies on complex regulatory, governance, investigative, and transactional matters. He is widely sought for his experience across traditional and emerging markets, including commodities, derivatives, securities, digital assets, and prediction markets. Ryne delivers clear, commercially focused guidance to help clients achieve strategic objectives and is valued for his longstanding relationships with market participants and regulators across the trading and markets industry. Clients rely on Ryne’s deep experience with the regulatory and enforcement programs of the Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission, FINRA, National Futures Association, FinCEN, Department of Justice, and other federal and state regulators. Executives consistently seek his judgment on high-stakes matters involving investigations, governance, strategic relationships and negotiations, and crisis and incident response. Ryne is a frequent speaker at trading and markets industry events, a guest lecturer at leading U.S. law and business schools, and has testified before Congress on digital asset market structure regulation. He has also participated in a CFTC roundtable on the evolution of U.S. derivatives market structure. Before joining Morrison Foerster, Ryne served as chair of the Commodities, Futures & Derivatives Group and co-chair of the Fintech, Crypto, Trading & Markets Group at another leading law firm. Earlier in his career, he was a New York-based partner and co-head of the Commodities and Derivatives practice at an Am Law 10 firm, served as legal counsel to a former chairman of the CFTC, and was general counsel to a U.S. financial services and digital assets business.

Ryne Miller

Partner

Trevor Levine is a partner in the firm’s Financial Services Group, where he advises financial services firms and digital asset companies on turning regulatory complexity into commercial opportunity. He advises clients operating at the intersection of finance and technology, guiding them through rapidly evolving legal frameworks while supporting growth, innovation, and market expansion. Trevor advises exchanges, intermediaries, market participants, and technology companies on issues arising under the Commodity Exchange Act, including representing clients seeking to register with the CFTC and NFA. He also helps clients navigate federal securities laws, FINRA rules, and state money transmission laws. Clients trust Trevor to guide them through regulatory inquiries while helping them design, launch, and operationalize compliant financial products and structures, including advising on applicable registration and licensing processes. Before joining Morrison Foerster, Trevor served as general counsel to a brokerage firm focused on the digital asset, Bitcoin mining, and data center sectors. In that role, he oversaw legal and regulatory matters across multiple regulated subsidiaries, including a FINRA-registered broker-dealer, an NFA-registered introducing broker, and a New York BitLicensee. He also previously worked in-house at a large, regulated digital asset trading platform, where he advised on the acquisition and maintenance of CFTC, SEC, and state licenses. Earlier in his career, Trevor practiced at two Am Law 100 firms, advising clients on a range of regulatory matters, including CFTC inquiries related to reporting obligations and market activity, as well as state and federal regulatory issues involving consumer lending practices. He has also advised companies on the development and launch of blockchain networks, cryptocurrencies, and decentralized applications.

Trevor Levine

Maria Aguilar-Rocha is an associate in Morrison Foerster’s Washington, D.C. office and a member of the Financial Services Group.Maria advises traditional financial services firms and financial technology companies on complex securities, derivatives, and digital asset regulatory, transactional, enforcement, and compliance matters. She leverages her prior experience as a senior financial regulator and deep knowledge of the Commodity Exchange Act, federal securities laws, and Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), National Futures Association (NFA), and Financial Industry Regulatory Authority (FINRA) rules and regulations to provide clients with solutions strategically designed to meet their objectives. Maria advises clients on a broad range of matters, including launches of innovative products and trading platforms, registration applications for traditional and vertically-integrated market structures, prediction markets and event contract regulation, and compliance with intermediary, market, and clearing rules and regulations.Prior to joining Morrison Foerster, Maria served as Senior Counsel to a CFTC Commissioner and as Special Counsel in the CFTC’s Market Participants Division, where she advised on innovative market structure legislation, registration applications for designated contract markets, derivatives clearing organizations, futures commission merchants, and other market participants, rulemakings on event contracts and other prominent issues, enforcement actions in the digital asset and decentralized finance space, and no-action relief from several of the CFTC’s rules and regulations. She also practiced at two other international law firms, where she advised multinational companies on financial and environmental compliance issues; worked in the U.S. Department of Justice’s Criminal Division, Fraud Section, Securities and Financial Fraud Unit, where she handled large-scale, high-profile investigations and prosecutions of financial firms; and clerked for a federal judge at the U.S. District Court for the Southern District of New York, where she managed complex securities class actions, commercial disputes, and other business matters.Maria received her J.D. and LL.M., with distinction, in Securities and Financial Regulation from Georgetown University Law Center, where she served as Chair of the Diversity Committee and Articles and Notes Advisor on the Georgetown Journal of International Law and as Editor on the Georgetown Journal of Law and Modern Critical Race Perspectives. She was also a fintech fellow in the law school’s premier Institute of International Economic Law. She received her B.A., cum laude, from the University of California, Los Angeles.

Maria Aguilar-Rocha

Associate

Matthew Goldberg is an associate in Morrison Foerster’s Washington, D.C. office and a member of the Financial Services Group.Matthew represents financial institutions, FinTech companies, digital asset platforms, prediction markets, exchanges, clearing organizations, and derivatives market participants in regulatory, compliance, and transactional matters involving commodities, digital assets, and other financial products. He advises clients on issues arising under the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) regulations, FINRA rules, and state law, with a particular focus on market structure, trading operations, and ongoing regulatory compliance. He also represents clients in government investigations by the CFTC, NFA, and DOJ.Prior to joining Morrison Foerster, Matthew was an associate at two leading law firms, where he focused on financial and energy regulatory, enforcement, and transactional matters.He earned his J.D. with honors from the George Washington University Law School and his B.A. in government and politics from the University of Maryland.

Matthew Goldberg

Financial Services