US perpetual futures approvals draw risk warnings from Wall Street

The Trump administration is pushing to bring offshore-style perpetual futures into the United States, where regulators have approved contracts tied to crypto and individual stocks, Reuters reported on November 9. Traditional market participants warn that the products could add risks to derivatives markets as financial firms enter the new business.

Perpetual futures trade continuously and have no expiry, so positions can be held indefinitely. They are usually leveraged, sometimes by as much as 50 times, and were pioneered in non-US crypto markets, according to Reuters.

• The CFTC approved US-listed crypto perpetual futures in May; Kalshi, Coinbase and Robinhood have entered the market.
• The regulator also approved single-stock equity perpetual futures the week before Reuters’s report.
• CME Group and a group representing Cboe Global Markets and Citadel Securities have sued over the approvals and the products’ classification.

Why exchanges are challenging the CFTC’s classification

The CFTC’s position, as described by Reuters, is that perpetuals have futures-like features and their funding mechanism serves in place of an expiration date. Chair Michael Selig has said US oversight is important to protect American investors. Executives interviewed by Reuters argue futures-style margin rules may be inadequate if the contracts behave more like swaps, leaving counterparties and markets exposed during volatility.

Automatic liquidation can add to that pressure, some market participants warned: when a trader’s margin falls below required levels, the platform may close the position. Reuters reported that similar mechanisms amplified a selloff during the biggest-ever liquidation of bitcoin positions the previous year. The CFTC has advised futures commission merchants to improve customer disclosures about automatic liquidations during extended trading hours.

What round-the-clock trading requires

Continuous trading means exchanges, clearing houses, brokers and traders must manage positions and margin calls at all hours, including moving cash and collateral outside standard banking hours. Reuters reported that CME shelved a proposed 24-hour crude-oil futures contract the previous month, mainly because commercial clients were unwilling to staff weekend trading desks. The comparison highlights an operational challenge that could grow as perpetuals expand into larger markets.

What it means for US investors

Crypto perpetual-futures volume reached $61.7 trillion in 2025, up 29 percent from 2024, according to CryptoQuant data reported by Reuters. Much of that activity was on platforms including Binance and Hyperliquid and based in Asia. Some industry executives told Reuters that without a workable US framework, trading could continue to grow overseas and draw US investors and funds with it; Kalshi’s head of institutional business argued that transparent, US-regulated trading is preferable to leaving activity offshore.

In separate market coverage, Yonhap reported that US stocks closed higher on Friday, with the S&P 500 up 0.31 percent and the Nasdaq up 1.09 percent, led by a rebound in chipmakers.