U.S. crypto firms can offer perpetual, or “delinquent” futures contracts without running afoul of the U.S. Commodity Futures Trading Commission, according to the agency’s first approval of an unnamed exchange to list and trade bitcoin perpetuals, the regulator said on Friday.
The delinquent is a type of derivative that allows the investor to speculate on future price movements in a crypto asset without putting 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 with a long history of overseeing traditional crypto futures now clears a path into the US for the potentially lucrative and popular realm of crypto criminals that had previously been pursued more in non-US jurisdictions.
The CFTC did not immediately identify the regulated exchange it said would be approved for the first true bitcoin offender, but the announcement closely follows President Donald Trump’s social media post this week that cited Perpetuals and argued that regulators under the previous administration “almost DESTROYED the American 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 critical risk management and price discovery tool in global cryptoasset markets.”
“Having true perpetual contracts in the United States is a big step forward in meeting President Trump’s goal of establishing the United States as the crypto capital of the world,” Selig wrote in an op-ed published Friday on CoinDesk. He said his agency is now providing “a viable framework for true cryptoasset perpetual contracts.”
Criminals, usually amplified with leverage, can be a way to profit greatly from even minor price movements in assets like bitcoin. and Ethereum ether (ETH), but that also means they can go in the other direction just as quickly, making them a volatile investment.
Selig had said in March that he had been trying to repair the damage caused by the previous US administration that “pushed many of these companies and liquidity overseas.” Some of the crypto-native exchanges the agency oversees in the US include Coinbase, Bitnomial (recently acquired by Kraken), and Gemini, in addition to prediction market firms such as Kalshi and Polymarket.
Selig wrote Friday that his agency’s approach toward criminals would “limit excessive leverage, volatility and systemic risk.”
There are also other dangers associated with perpetuals, as seen this week with the flash crash of Hyperliquid SPACEX-USDH, a crypto perpetual contract for SpaceX’s market valuation, which caught many investors off guard and wiped out some $1.5 million in notional value in 30 minutes due to an outsized 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 been breaking new ground on crypto policy with new statements, so-called no-action letters, approvals and guidance that reveal their current stance on various aspects of the industry. But until policies are established with formal rules or (even more durable) new laws, future agency leaders can easily overturn them.
In March, the two agencies published a landmark guide that, for the first time, offered their definitions for classifying various cryptoassets. The new taxonomy outlined a series of categories that assets could be placed into that would establish how they would be regulated and by whom, and also set standards for how a crypto security can eventually move out of that classification as its project matures.
The SEC is also set to release a wide-ranging new crypto policy aimed at paving the way for the tokenization of securities by offering temporary exemptions from registration for innovations in digital assets. The change, a prominent project of SEC Chairman Paul Atkins, is planned as a stopgap measure to encourage crypto activity while the industry awaits a more permanent law from Congress.
Read More: CFTC Chief Selig to Clear Way for US Perpetual Futures in Coming Weeks
