U.S. crypto companies can offer perpetual futures, or “perps,” without running afoul of the U.S. Commodity Futures Trading Commission, under the agency’s first approval of an unnamed exchange to list and trade Bitcoin perpetuals, the regulator said Friday.
Perp is a kind of derivative that allows the investor to speculate on future price movements of a crypto asset without setting an expiration date on that contract, allowing it to be held for as long as the investor wants. With this first approval on a registered platform, the US derivatives regulator, which has long overseen traditional cryptocurrency futures, is now paving the way in the US for the potentially lucrative and popular crypto originator arena that was previously more sought after in non-US jurisdictions.
The CFTC did not immediately identify the regulated exchange it said would be approved for the first true Bitcoin hack, but the announcement closely follows President Donald Trump’s social media post this week that cited perpetuals and claimed that regulators in the previous administration “nearly DESTROYED the US crypto industry by pushing Bitcoin, crypto perpetuals and INNOVATION overseas, but ‘TRUMP’ SAVED IT.”
Trump’s CFTC Chairman Mike Selig argued that the contracts represent “a fundamental risk management and price discovery tool in global crypto asset markets.”
“Having true perpetual contracts in the United States is a major step in achieving President Trump’s goal of cementing America as the crypto capital of the world,” Selig wrote in an opinion piece published Friday on CoinDesk. He said his agency now provides “a viable framework for true crypto asset perpetual contracts.”
Criminals, usually amplified by leverage, can be a way to profit from large, even minor, price movements in assets such as bitcoin. and Ethereum’s ether (ETH), but that also means they can go the other way just as sharply, making them a volatile investment.
Selig said in March that he was trying to undo the damage caused by the previous U.S. administration that “drove a lot of these companies and the liquidity overseas.” Some of the crypto-native exchanges the agency oversees in the United States include Coinbase, Bitnomial (which was just acquired by Kraken), and Gemini, as well as prediction market companies such as Kalshi and Polymarket.
Selig wrote Friday that his agency’s approach to criminals would “limit excessive debt, volatility and systemic risk.”
There are other dangers associated with perpetuals as well, as evidenced this week by the flash crash of the hyperliquid SPACEX-USDH, a crypto perpetual contract for SpaceX’s market valuation, catching many investors off guard and erasing some $1.5 million in notional value in 30 minutes due to an oversized position that absorbed the market’s low liquidity.
The CFTC’s new position does not yet have the weight of a formal rule. The CFTC and its sister agency, the Securities and Exchange Commission, have led the way on crypto policy with new statements, so-called no-action letters, approvals and directives revealing their current stance on various aspects of the industry. But until these policies are defined by formal rules or – even more durable – by new laws, then they can be easily overturned by future agency leaders.
In March, both agencies released very important guidelines which, for the first time, offered their definitions for classifying various crypto assets. The new taxonomy outlined a series of categories into which assets could be placed, which would establish how they would be regulated and by whom, and it also set standards for how a crypto security could potentially move out of this classification as its project matured.
The SEC is also set to release a sweeping new cryptocurrency policy intended to pave the way for securities tokenization by providing temporary registration exemptions for digital asset innovations. This change – a signature project for SEC Chairman Paul Atkins – is intended as an interim measure to foster crypto activity while the industry awaits more permanent legislation from Congress.
Read more: CFTC chief Selig to pave way for US perpetual futures in coming weeks
