U.S. CFTC opens crypto 'perp' door with first approval at regulated firm

The Commodity Futures Trading Commission has now established a stance on how regulated U.S. firms can engage in crypto perpetual futures contracts.

What to know:

• The U.S. Commodity Futures Trading Commission has given approval for bitcoin perpetual futures contracts on a regulated exchange, marking a first for U.S. perps.
• The derivatives regulator has now set a standard for firms to approach such contracts, which CFTC Chairman Mike Selig called a "major step forward" in adopting policies to boost the U.S. crypto space.

U.S. crypto firms can offer perpetual futures contracts, or "perps," 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 perp is a kind 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 as long as the investor wants. With this first approval on a registered platform, the U.S. derivatives regulator with a long history overseeing traditional crypto futures now opens a U.S. path for the potentially lucrative and popular arena of crypto perps that have previously been pursued more in non-U.S. jurisdictions.

The CFTC didn't immediately identify the regulated exchange that it said would be approved for the first true bitcoin perp, but the announcement follows closely on the heels of President Donald Trump's social-media post this week that cited perpetuals and argued that the previous administration's regulators "nearly DESTROYED the American Crypto Industry by driving Bitcoin, Crypto Perpetuals, and INNOVATION offshore, but 'TRUMP' SAVED IT."

Trump's CFTC chairman, Mike Selig, argued that the contracts represent "a foundational risk management and price discovery tool in the global crypto asset markets."

"Having true perpetual contracts in the United States is a major step forward in delivering on President Trump’s goal of cementing America as the crypto capital of the world," Selig wrote in an opinion piece published Friday at CoinDesk. He said his agency is now providing "a workable framework for true crypto asset perpetual contracts."

Perps, typically amplified with leverage, can be a way to cash in big on even minor price movements in assets such as bitcoin BTC$73,565.90 and Ethereum's ether (ETH), but that also means they can go the other direction just as sharply, making them a volatile investment.

Selig had said in March that he has been trying to repair damage from the previous U.S. administration that "drove a lot of these firms and the liquidity offshore." Some of the crypto-native exchanges the agency oversees in the U.S. include Coinbase, Bitnomial (just acquired by Kraken) and Gemini, plus prediction-market firms such as Kalshi and Polymarket.

Selig wrote on Friday that his agency's approach to perps would "limit excessive leverage, volatility and systemic risk."

There are other dangers associated with perpetuals, too, as witnessed this week with the flash crash in the Hyperliquid SPACEX-USDH, a crypto perpetual contract for SpaceX's market valuation, catching many investors off-guard and wiping out some $1.5 million in notional value within 30 minutes because of one outsized position that absorbed the market's thin liquidity.

The CFTC's new stance doesn't yet carry the weight of a formal rule. The CFTC and its sister agency, the Securities and Exchange Commission, have been blazing a crypto policy trail with new statements, so-called no-action letters, approvals and guidance revealing their current stance on various aspects of the industry. But until the policies are set with formal rules or — even more durable — new laws, then they can be easily overturned by future agency leaders.

In March, the two agencies released highly consequential guidance that — for the first time — offered their definitions for classifying various crypto assets. The new taxonomy described a series of buckets the assets could be placed in that would establish how they'd be regulated and by whom, and it also set out standards for how a crypto security may eventually transition out of that classification as its project matures.

The SEC is also poised to release a wide-reaching new crypto policy meant to pave the way for the tokenization of securities by offering temporary exemptions from registration for digital asset innovations. The shift — a marquee project for SEC Chairman Paul Atkins — is planned as an interim measure to foster crypto activity while the industry awaits a more permanent law from Congress.

Read More: CFTC chief Selig to clear path for U.S. perpetual futures in coming weeks

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