Article by Mahe, Foresight News
On May 29, the U.S. Commodity Futures Trading Commission (CFTC) announced two landmark actions on the same day: formally approving KalshiEX, LLC (Kalshi)'s submission of a bitcoin perpetual contract. Additionally, the CFTC issued a no-action letter to Coinbase, permitting Coinbase to offer certain perpetual futures products to U.S. customers through its subsidiary.
The CFTC has issued a Policy Statement on the Listing of Perpetual Contracts, providing a clear guidance framework for the listing of perpetual products on regulated markets. This coordinated move marks a critical step in transitioning U.S. crypto derivatives regulation from a long-standing gray area toward a compliant pathway for true perpetual contracts.
Kalshi and Coinbase have both received regulatory approval.
The CFTC's review determined that Kalshi's Bitcoin perpetual contract complies with the Commodity Exchange Act and the core principles of a DCM (Designated Contract Market), including the depth and liquidity of the underlying Bitcoin spot market, contract design, and risk management capabilities. The approval order requires Kalshi to maintain ongoing compliance and explicitly states that perpetual contract design "is not necessarily suitable for all asset classes," encouraging other market participants to engage with regulators and submit proposed perpetual products for different underlying assets through the formal approval process.
In addition, the CFTC’s Market Participants Division has issued an interpretive letter and no-action letter to registered futures commission merchant Coinbase Financial Markets (CFM), permitting it to offer crypto options and perpetual contracts listed on Deribit to U.S. users. The letter confirms that such perpetual contracts may be classified as foreign futures under CFTC Regulation 30.1. Under specific conditions, the CFTC will not recommend enforcement action against CFM for transferring customer-held digital commodities and payment stablecoins to its overseas affiliate for margin purposes, provided that the affiliate may reuse such customer assets.
Previously, the U.S. market lacked true perpetual contracts (with no expiration date). Coinbase Derivatives introduced “perpetual-style” futures in July 2025 via self-certification, with contract durations up to five years, aiming to replicate perpetual economic characteristics while still retaining an expiration date. Today’s approval and non-enforcement action provide a dual compliance pathway for “true perpetuals”: Kalshi follows the DCM standard futures route, while Coinbase reaches U.S. customers through foreign futures combined with crypto collateral.
Mike Selig
CFTC Chairman Mike Selig emphasized that perpetual contracts are a vital tool for risk management and price discovery in the global crypto asset market. Launching genuine perpetual contracts in the United States is a crucial step toward positioning the U.S. as a global crypto hub. He noted that the CFTC has established a viable regulatory framework for crypto asset perpetual contracts and will uphold market integrity by limiting excessive leverage, market volatility, and systemic risk.
Selig also acknowledged that the CFTC’s current regulatory stance has not yet been formalized into permanent rules, and future policies may still be adjusted as the regulatory environment evolves.
Trillion-dollar market opportunity
So why hadn't the CFTC previously approved genuine Bitcoin perpetual contracts?
Perpetual contracts are considered a "novel" product within the traditional commodities futures framework. They have no expiration date or final settlement, which conflicts with the conventional understanding under the Commodity Exchange Act that futures must have an expiration date and a convergence mechanism. The CFTC internally debated whether to classify them as futures or swaps, as each classification would entail entirely different regulatory requirements (including clearing, margin, and reporting obligations). This legal ambiguity has made it difficult for platforms to establish a solid compliance pathway.
In addition, its high leverage and speculative nature, along with concerns about market manipulation, have consistently led the CFTC to maintain a cautious stance.
BTCPERP is a perpetual contract that tracks the spot price of Bitcoin, with no fixed expiration date, and periodically settles between long and short positions through the funding rate mechanism to maintain a tight peg to the spot price.
In the global crypto derivatives market, perpetual contracts have long held a dominant position. According to CoinGecko’s 2025 Annual Report, the total trading volume of crypto derivatives on centralized exchanges reached approximately $857 trillion, with perpetual contracts accounting for about 78%. In 2025, the cumulative trading volume of perpetual contracts on decentralized exchanges reached approximately $6.7 trillion (+346% year-over-year).
Ironically, while regulatory traditionalists in Washington debate compliance, offshore decentralized perpetual platforms like Hyperliquid have already extended their reach to S&P 500, crude oil, and gold through on-chain synthetic assets. By the end of May 2026, Hyperliquid’s perpetual trading volume had risen to $586.12 billion, and according to Allium on-chain data, the platform’s total open interest in derivatives reached a historic high of nearly $60 billion by the end of May, with an increasing number of individuals and institutions choosing to trade on it.
Hyperliquid Latest Open Interest
This unprecedented CFTC approval is not merely a concession to the crypto market, but a necessary onshore defense against the offshore innovation that treats all assets as perpetual futures.
In contrast, regulated Bitcoin futures such as those on CME provide a stable hedging tool for institutions, but their leverage and trading characteristics differ from those of perpetual contracts preferred by retail and professional traders.
The CFTC’s approval this time undoubtedly opens a new frontier for Kalshi in the prediction market, completely blurring the boundaries between prediction markets and traditional crypto derivatives markets. Kalshi can now leverage compliant event settlement logic to tap into perpetual funding pools previously dominated by centralized exchanges. For Coinbase, its perpetual contract trading volume and revenue may be clearly reflected in its next earnings report.
U.S. traders previously relied primarily on offshore platforms, facing custody risks, regulatory uncertainty, and barriers to institutional access. This regulatory clarification, supporting crypto collateral, will attract traditional institutions such as hedge funds and family offices to participate. Traders can hold leveraged positions long-term to hedge spot exposure without frequent trading, while also drawing some offshore liquidity back to U.S.-compliant channels.
Meanwhile, the approval of Kalshi and Coinbase will spur the accelerated launch of other products such as ETH perpetuals, creating a more comprehensive crypto derivatives ecosystem. In the long term, this policy could enhance the United States' competitiveness in the global crypto derivatives landscape, attracting more capital, talent, and infrastructure, and creating favorable conditions for the deep integration of crypto assets with traditional finance.
Today may be the most regulator-friendly era for the crypto industry.