By Laura Matthews and Hannah Lang
NEW YORK, November 9 (Reuters) – The Trump administration’s push to bring novel offshore perpetual futures to the US is raising alarms, according to interviews with four executives at incumbent exchanges and other key market participants who warned that the products will introduce serious new risks to the multitrillion-dollar derivatives market.
Pioneered in non-US crypto markets, perpetual futures, or “perps,” trade around the clock and do not expire, meaning investors can hold positions indefinitely. They are usually leveraged, sometimes by as much as 50 times, and are predominantly traded by retail or individual investors.
Crypto perps trading volume reached $61.7 trillion in 2025, up 29% from 2024, according to data provider CryptoQuant, with much of that on big platforms such as Binance and Hyperliquid and based in Asia.
The Reuters interviews with executives at exchanges, trading firms, asset managers and market-structure providers revealed broader concerns that improperly regulated perps and 24-hour trading could disrupt market structure and erode risk-management safeguards bolstered after the 2007-09 financial crisis.
Traditional Wall Street exchanges were alarmed by the US Commodity Futures Trading Commission’s decision in May to formally approve US-listed crypto perps, with Kalshi, Coinbase, Robinhood and other financial technology firms jumping into the new market.
Last week, the government regulator also approved single-stock equity perps. CFTC Chair Michael Selig has said it is important to maintain US oversight of the nascent market to protect American investors.
TENSION BETWEEN ADMINISTRATION, STREET
CME Group, the big futures market operator, is suing the CFTC to overturn its May decision, arguing it has wrongly classified perps as futures, creating unfair competition and downplaying their risks. A group representing Cboe Global Markets and Citadel Securities also sued last week to reverse the CFTC’s recent equity perp approval on the same grounds.
“I think they’ve muddied the waters here significantly,” said Terry Duffy, CME’s chief executive and a 40-plus-year industry veteran. “Anytime you have ambiguity in markets … that could hurt the business.”
The CFTC declined to comment on the concerns raised in the interviews. It has previously said the CME had chosen “lawfare” over competing in the new market.
The clash is the latest sign that the administration’s support for crypto and prediction markets, where some of the leading companies also run new exchanges, is fueling tensions with traditional Wall Street firms.
The standoff over market risks could grow next year when Democrats, propelled by midterm elections this week that handed them control of Congress, are likely to square off against President Donald Trump and step up oversight of the young industries.
“Many of these incumbents haven’t faced this type of disruption for a very long time,” said Chris Perkins, head of crypto at Franklin Templeton.
EXCHANGES SAY PERPS ARE SWAPS, NOT FUTURES
The CFTC’s May decision sent exchange shares tumbling on competition fears. They have since recovered and executives have said they do not view perps as a serious threat to their predominantly institutional businesses.
Their chief concern is that treating perps as futures gives retail investors access to the novel products under a regulatory regime they say provides insufficient safeguards against leverage and counterparty risk. They argue the products are more akin to swaps, which face tougher margin, capital and reporting requirements and are generally less accessible to retail investors.
Traditional futures let counterparties lock in a transaction price for a later date, while swaps involve counterparties periodically exchanging cash flows or liabilities based on a benchmark. Because perps do not expire and involve ongoing funding payments between counterparties, they meet the 2010 Dodd-Frank Act’s definition of a swap, exchanges say.
In public legal notes, derivatives attorneys have said the CME has raised legitimate issues. The CFTC has said perps have futures-like features and their funding mechanism is a substitute for expiration.
“The industry is at an inflection point where product classification risks becoming a competitive tool,” said Rob Hocking, global head of derivatives at Cboe, adding that the development is bad for markets.
“There needs to be a resolution in short order.”
MISCLASSIFICATION, 24/7 TRADING SEEN AS RISKY
Futures-style margin requirements may be inadequate for products that behave more like swaps, increasing counterparty and liquidity risks during intense volatility, the executives said.
Mechanisms that automatically liquidate traders’ perp positions when their margin falls below required levels could amplify such stress, some said. Last year, such mechanisms triggered the biggest ever liquidation of bitcoin positions, amplifying the selloff.
The CFTC, in an advisory to futures commission merchants, has emphasized the need for enhanced customer disclosures about auto-liquidation features during extended trading hours.
The upstart platforms, meanwhile, are pushing to extend the products into other assets. Some of their executives say that without a workable US framework, the market will continue to flourish overseas and take US investors and funds with it.
“I think it’s better for those products to trade transparently inside the US regulatory perimeter than for that activity to remain offshore,” said Andy Ross, Kalshi’s head of institutional business.
Some industry executives also say that perps pose market-structure risks. Because they trade continuously, the products require exchanges, clearing houses, brokers and traders to manage positions and meet margin calls around the clock.
That may work in smaller, pre-funded crypto markets, executives said, but it becomes more complex in larger markets where participants must move a lot of cash and collateral outside standard banking hours.
The CME last month said that it had shelved its proposed 24/7 crude oil futures contract mainly because commercial clients were unwilling to staff weekend trading desks.
“The traditional financial market infrastructure in the US is not yet fully equipped for true 24/7 markets,” said Thomas Restout, chief executive of B2C2, an institutional crypto market maker.
(Reporting by Laura Matthews and Hannah Lang in New York; editing by Michelle Price and Jonathan Spicer)
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