A significant step is being prepared in the US regarding the regulatory framework for cryptocurrency derivatives markets.
Mike Selig, Chairman of the US Commodity Futures Commission (CFTC), announced that guidance paving the way for crypto perpetual futures trading in the US will be released in the coming weeks.
Speaking at a Milken Institute event in Washington, Selig noted that perpetual contracts, which do not expire and are often associated with leveraged trading, have long been developing on platforms outside the US. He said the main reason for this is the US’s past regulatory approach to the sector.
Selig said, “We are working to bring true professional futures trading to the U.S. within the next month. We expect to make an announcement very soon.” Arguing that the previous administration pushed many crypto firms and liquidity out of the country, Selig stated that they aim to reverse this trend in the new era.
Kraken, a cryptocurrency exchange, recently announced it will offer perpetual futures trading on tokenized shares for users outside the US, demonstrating the accelerating global competition in the sector.
Selig took the stage at the event alongside Paul Atkins, Chairman of the US Securities and Exchange Commission (SEC). The two institutions’ shared vision for digital assets is taking shape under the title “Project Crypto”.
Both regulatory bodies are working on “innovation exceptions” to encourage innovation in the crypto space. This could allow developers and companies to conduct certain experimental activities without fear of regulatory repercussions.
Selig also stated that the approach towards decentralized finance (DeFi) developers will be clarified soon. Following years of litigation and regulatory uncertainty, clearer standards are planned.
The CFTC Chairman also announced that guidance on prediction markets intersecting with the cryptocurrency sector will be released “very soon.” The scope of operations for platforms like Polymarket and Kalshi, in particular, has been a point of contention between state regulators and federal authorities.
Selig argued that the CFTC is the lead regulator over these companies, stating that different regulatory regimes “can coexist in parallel.” He also indicated that a formal regulatory process would be initiated to evolve the guidance to be published into a more permanent set of rules in the future.
SEC Chairman Atkins stated that the biggest obstacle to current regulatory efforts is the lack of a legal basis. Previously arguing that the SEC could proceed without new legislation, Atkins this time said, “We really need legal certainty. We need Congress’s opinion.”
Two years ago, a decision by the U.S. Supreme Court limited some of the powers that federal agencies have in the courts. This makes it more difficult for agencies like the SEC and CFTC to create lasting policy through guidance alone, and opens the door for future administrations to easily change those policies.
*This is not investment advice.
