Two major names in crypto are telling regulators to rethink the playbook.
The Hyperliquid Policy Center and Phantom wallet have both submitted comments urging the CFTC to stop treating onchain protocols like traditional brokers and exchanges. Their message: the rules made for Wall Street don’t fit code running on a blockchain.
The request comes in response to a joint Request for Information from the CFTC and SEC back in mid-June, focused on financial innovation. The agencies asked for input on how emerging tech — including decentralized platforms — should fit into existing regulatory frameworks.
Hyperliquid and Phantom’s argument is pretty direct. Onchain protocols aren’t intermediaries in the traditional sense. They don’t hold customer funds, they don’t make markets, and they don’t pick winners and losers. Applying broker-dealer rules designed for human-run firms to automated smart contracts just doesn’t work.
It’s not a new debate, but it’s one that’s getting more urgent. With Congress weighing multiple crypto bills and the CFTC positioning itself as the lead digital asset regulator, how these definitions shake out will matter. If the CFTC decides DeFi protocols need to register as exchanges, that changes everything.
The RFI response period is a chance for the industry to shape the conversation before rules get locked in. Hyperliquid and Phantom are taking it seriously. The question is whether the CFTC is ready to listen.
