Wall Street executives warn CFTC-approved perpetual futures pose new risks to US markets
In brief
- Perpetual futures could bring serious new risks to US derivatives, four unnamed executives told Reuters.
- CFTC approved Bitcoin perps in May 2026 and single-stock perps on November 3.
- CME Group sued the CFTC in June, claiming perpetuals should be classified as swaps, Crypto Briefing reported.
- Cboe and Citadel joined a group that filed follow-on litigation in November, per Crypto Briefing.
A contract that never expires
A perpetual future has no expiration date and trades around the clock, including nights and weekends. It doesn't settle on a fixed day, so it relies on a funding rate mechanism to keep the contract's price anchored to the underlying asset. Crypto Briefing reported that perps were predominantly used by retail investors rather than institutional desks.
The leverage is where the concern sits. Offshore venues offered 50 to 100 times leverage, and at 50x a 2% adverse price move could wipe out a trader's entire stake.
The four executives quoted by Reuters weren't named.
How perps came onshore
CFTC Chairman Michael S. Selig led the push to bring the products onshore. The agency approved Bitcoin perpetual futures in May 2026 (the first time such contracts were cleared for trading on a US-registered exchange), and single-stock equity perps followed on November 3. In August, President Trump discussed bringing platforms like Hyperliquid, a decentralized perps venue, onshore as well.
The offshore market is big. Crypto Briefing put offshore crypto perp volume at $61.7 trillion in 2025, up 29% year over year, with nearly all of it taking place outside US oversight.
Lawsuits over a label
CME Group sued the CFTC in June 2026 over the Bitcoin perps approval, Crypto Briefing reported. CME claims perpetuals should be classified as swaps rather than futures, and that calling them futures would unfairly harm competition among exchange operators. It's not a fight over semantics: swaps and futures sit under different regulatory regimes, so the label decides which rules apply and which venues can list the products.
A group including Cboe and Citadel filed follow-on litigation in early November, after the equity perps decision, Crypto Briefing reported.
Supporters said regulated US platforms may cap leverage at about 6x, according to Crypto Briefing, compared with the 50x to 100x commonly available offshore. Opponents worried that perps could unsettle risk management practices built up after the 2008 financial crisis.
Frequently asked questions
How do perpetual futures work?
A perpetual future has no expiration date and trades around the clock, including nights and weekends. It uses a funding rate mechanism to keep the contract's price anchored to the underlying asset. According to Crypto Briefing, retail investors use perps far more than institutional desks do.
Why did CME Group sue the CFTC over Bitcoin perpetual futures?
CME Group sued the CFTC in June 2026 over its approval of Bitcoin perps, Crypto Briefing reported. CME claims perpetuals should be classified as swaps, not futures, and that the futures label would unfairly harm competition among exchange operators. Swaps and futures fall under different regulatory regimes, so the label decides which rules apply and which venues can list the products.
How much leverage do perpetual futures offer in the US versus offshore?
Offshore venues offered leverage of 50 to 100 times. At 50x, a 2% adverse price move could wipe out a trader's entire stake. Supporters said regulated US platforms may impose limits of about 6x, according to Crypto Briefing.
