CFTC Chair Says Perpetual Contracts Unsuitable for Traditional Commodity Markets

Crypto perpetual contracts have no expiry date and use periodic funding payments between long and short positions to keep prices aligned with spot markets. The dispute centers on whether such products should be regulated as futures or swaps in the United States, a distinction with implications for oversight, taxation and competition. Chicago Mercantile Exchange Inc. argues the Commodity Futures Trading Commission reversed its earlier treatment of perpetuals without adequately explaining the legal basis.

The CFTC approved KalshiEX LLC’s Bitcoin perpetual futures contract, BTCPERP, on May 29, 2026, and CME sued on June 18. In a Sept. 2 filing in federal court in Washington, the regulator sought dismissal, saying CME lacks standing because it has not shown a concrete competitive injury and may list comparable products as a designated contract market. The agency also argued that reclassifying the contracts as swaps would not eliminate the alleged competition. CME’s response is due Oct. 2.

Crypto perpetual futures, contracts without an expiry date, have become a major source of leveraged trading but remain concentrated on offshore venues. The regulatory question is whether the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission can divide oversight without imposing duplicative costs that deter domestic liquidity. Kalshi estimates offshore perpetuals volume exceeded $90 trillion in 2025, up from about $28 trillion in 2023, underscoring both the market’s scale and the risk of leaving it largely outside U.S. supervision.

A bipartisan group including former CFTC Chair Chris Giancarlo, former commissioners Brian Quintenz and Sharon Brown-Hruska, former SEC Commissioner Steven Wallman and former SEC Chief Economist Chester Spatt urged a risk-based approach in a comment letter reported on Aug. 31, 2026. The SEC and CFTC sought input in June on definitions and jurisdiction for swaps and emerging derivatives as the CLARITY Act remained stalled during recess. Separately, the SEC sent revised crypto-custody rules to White House review in late August, while comments on its “Reg Crypto” proposal are due Oct. 20.

Perpetual futures have no fixed expiry and use recurring funding payments to keep prices aligned with the underlying spot asset, making them well suited to bitcoin’s round-the-clock market. Much of that trading developed offshore because the United States lacked a workable regulatory route. Commodity Futures Trading Commission Chairman Michael S. Selig argues that bringing such products under U.S. oversight can strengthen domestic competitiveness while applying safeguards against excessive leverage, volatility and systemic risk.

On May 29, 2026, the CFTC approved KalshiEX LLC’s BTCPERP for listing as a futures contract, opening a U.S.-regulated venue to what Selig described as the country’s first true bitcoin perpetual. In an op-ed published the same day, he cast the decision as part of a broader push to keep financial innovation onshore instead of following foreign regulatory trends. The agency is also advancing tokenized-collateral rules and considering wider use of regulated payment stablecoins as customer margin.

Bitcoin perpetual futures have no expiry date, allowing traders to maintain leveraged positions over long periods through margin and funding-rate payments. Trading in the contracts has historically been concentrated on offshore crypto exchanges. Bringing them under U.S. Commodity Futures Trading Commission (CFTC) oversight would give retail and institutional investors a regulated channel while improving market transparency and investor protection.

In May 2026, the CFTC approved KalshiEX’s listing of the BTCPERP contract, marking the first entry of Bitcoin perpetual futures into the regulated U.S. market. The approval allows investors to trade a Bitcoin derivative with no fixed expiry under the U.S. regulatory framework. Reports did not disclose the contract’s trading volume, maximum leverage or formal launch date.

The U.S. Commodity Futures Trading Commission recently approved Kalshi, Coinbase and Kraken to offer crypto perpetual contracts in the United States, aiming to bring demand previously concentrated on offshore platforms under domestic oversight. These high-leverage derivatives have no expiration date, raising retail investor protection and market competition concerns among traditional institutions.

CFTC Chair Michael Selig has publicly defended the approvals, arguing that regulated U.S. markets can give retail investors better protections than offshore platforms and saying some incumbents are “afraid of the future.” Reports have not disclosed the exact approval dates, contract sizes or trading volumes, but they confirm that all three platforms have been authorized to offer the products in the United States.

Crypto perpetual contracts have no expiry date and allow traders to maintain leveraged positions indefinitely, but U.S. derivatives regulations have long constrained the products, pushing much of their trading volume to offshore platforms. Through “Project Crypto,” the CFTC is coordinating with the SEC on jurisdiction over DeFi, prediction markets and crypto assets, a process that will determine whether U.S. firms can legally offer such products.

In July 2026, CFTC Chairman Mike Selig said the agency would announce a policy to legalize crypto-asset perpetual contracts within a month and backed keeping crypto markets open 24 hours a day, seven days a week. The CFTC has opened initial approval pathways for companies including Kalshi and Coinbase as crypto derivatives trading volume sits near a two-year low.