The US derivatives regulator has made it easier for ordinary apps to carry prediction markets, granting broad no-action relief to “passive software” providers on 17 September 2026.
The Commodity Futures Trading Commission’s Market Participants Division issued the position under Staff Letter No. 26-25, extending terms first granted to crypto wallet Phantom in a separate letter in March, according to PYMNTS.
Phantom’s blueprint goes wide
Qualifying developers can now offer access to regulated derivatives, including prediction markets, without registering as introducing brokers, provided they meet the same conditions the agency set for Phantom, according to Securities.io, which reported the new position runs “on substantially the same terms” as the original.
Providers can take a cut of trading revenue or charge transaction fees, but they cannot hold customer assets, generate buy or sell signals, or control how trades execute. Phantom’s version of that model already reaches more than 20 million wallets through its Kalshi-powered markets, secured via a no-action letter the CFTC granted in March, as CoinDesk reported at the time.
Aaron Brogan, founder of Brogan Law, told Bloomberg the wider relief means ‘you could use this to put a prediction market basically anywhere.’
Robinhood and Coinbase in the frame
Robinhood (HOOD) offers event contracts through its Robinhood Derivatives unit and a partnership with CFTC-regulated exchange KalshiEX, the sort of tie-up the new relief is designed to make easier to replicate elsewhere.
Coinbase Global (NASDAQ: COIN) has a related stake in the theme: the exchange has been building settlement and clearing infrastructure with ION to support Kalshi’s event contracts, a project running independently of Thursday’s letter, according to a CNN Markets wire report.
Coinbase shares closed 7.13% higher on the day at $185.31, though trading volume ran below the 20-day average and the stock remains within its recent range of $161.82 to $195.74, according to consolidated US exchange data. FINRA’s daily short-sale figures show the ratio for COIN drifting from 0.481 on 3 September to 0.615 on 17 September, the day the letter landed, per FINRA data.
Relief, not a rule
The position is temporary. It lasts only until the CFTC issues formal rulemaking or other guidance on broker registration for software developers, and staff-level no-action letters carry less weight than a Commission rule.
The timing sits awkwardly against the agency’s other recent moves. In August, the CFTC warned regulated prediction-market entities against using “deceptive” American-style gambling odds, a sign it is tightening some conduct rules even as it loosens registration ones, Bloomberg reported.
Robinhood, meanwhile, is fighting a separate battle over jurisdiction: it sued the state of Washington in March after officials moved against its Kalshi-linked prediction markets, arguing federal CFTC oversight should override state gambling law, according to KING5. Thursday’s letter does nothing to settle that fight.
Crowdfund Insider, citing the CFTC’s own release, said the new position “is similar to that provided in Staff Letter 26-09 and now is broadly available to such providers” — language the agency chose deliberately, given it stops short of a permanent rule.
What the filings show
Coinbase’s own numbers underline why the sector pays close attention to any regulatory opening. The exchange swung from net income of $432.6m in the third quarter of 2025 to losses of $394.1m in the first quarter of 2026 and $359.5m in the second, according to its 10-Q filings with the SEC. Revenue over the same two quarters fell to $1.41bn and then $1.22bn, down from $1.87bn in the prior quarter.
Against that backdrop, a regulatory framework that lets more consumer apps plug into prediction markets — without each needing its own broker registration — offers exchanges and clearing partners a route to volume that doesn’t depend on crypto prices alone. Whether the CFTC converts Thursday’s staff letter into a lasting rule, and how the state-level disputes over event contracts resolve, will shape how far that route extends.
This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.
