Odaily Planet Daily report: CFTC Chairman Mike Selig posted on X to address and clarify several market misconceptions about perpetual futures contracts, responding to recent controversy surrounding the CFTC’s approval of such contracts.
Mike Selig stated that the Commodity Exchange Act and related CFTC regulations do not explicitly require a "futures contract" to have a fixed expiration or delivery date. Since Congress has not provided a specific definition for this term, the determination of a futures contract relies primarily on judicial precedent and CFTC interpretations, and a fixed expiration date is not a necessary condition.
The claim that "CFTC-approved BTCPERP contracts allow U.S. users to use 250x leverage" is incorrect; high leverage is not an inherent feature of perpetual contract structures, but rather a characteristic of trading models previously used by offshore platforms. Perpetual contracts regulated by the CFTC will adhere to the same leverage limits as other regulated futures products.
In response to concerns that the CFTC did not provide industry participants with an opportunity for input and feedback, the CFTC issued a public request for comments on "perpetual contracts" and "24/7 trading" in April 2025, receiving over 100 responses from industry participants, including multiple CFTC-registered entities. Furthermore, regarding the view that the funding rate mechanism imposes high costs and encourages market misconduct, when accounting for the costs associated with opening and rolling traditional term futures contracts, the annualized holding cost of perpetual contracts via funding rates is broadly comparable to that of traditional futures. The funding rate mechanism actually helps maintain price alignment between the contract and the spot market and serves as a market-based disciplinary tool.