The Commodity Futures Trading Commission is considering writing rules to cement its stance on whether software developers should register as brokers with the agency, according to its Chair Michael Selig.
Just over a year into the job as CFTC chair, Selig is looking to further enshrine a friendlier crypto environment, particularly when it comes to protections for non-custodial software developers.
In March, the CFTC released a no-action letter that said it would not recommend an enforcement action against crypto wallet provider Phantom for failing to register as a broker. In it, the CFTC said software developers who meet certain conditions and provide self-custodial wallet software are not required to register as a broker, Selig said.
On Tuesday at the Consensus Miami conference hosted by CoinDesk, Selig said the agency is looking to cement that stance into rulemaking.
"As I said before, I prefer rulemaking, and so we're going to work to codify that and get it in rules very soon," Selig said. "But as a start, it's kind of a crawl, walk, run. We want to get some clear guidance out there to help these firms start to develop and offer their software in the U.S."
Both the CFTC and the Securities and Exchange Commission have taken steps to clarify their stances on the treatment of software developers. Last month, the SEC's Division of Trading and Markets released a staff statement to delineate that interfaces, such as DeFi wallets, would generally not be considered brokers. That guidance was intended as an "interim step while the Commission continues to consider various regulatory issues."
Federal fight
On Tuesday, Selig also reiterated that the nascent prediction markets sector falls under the exclusive remit of the CFTC, and stated that he will continue to sue states that are violating federal jurisdiction. Several states have attempted to ban prediction market for violating local gaming and gambling laws, particularly related to sports-related bets. So far, the CFTC has sued Wisconsin, Illinois, Arizona, Connecticut and New York over the issue.
"We'll continue to bring lawsuits whenever we see these impinge on our authority," Selig said.