Key Takeaways
- • The CFTC said Tuesday that perpetual futures on individual equities, called "Equity Perps," are deemed approved under Commission Regulation 40.3 as security futures products, allowing them to trade on U.S.-regulated exchanges for the first time.
- • Eligible venues must hold a CFTC designated contract market registration and an SEC notice registration as a national securities exchange for security futures; the statement names no exchange, contract, or launch date.
- • The move extends the framework the CFTC began in May, when it approved Kalshi's BTCPERP, the first U.S.-listed bitcoin perpetual, five months earlier.
- • The approval follows the roughly $6.3 billion hack of Binance's hot wallets on Oct. 29, which Chairman Michael S. Selig cited as evidence for bringing crypto-style products onshore.
- • CME Group's June lawsuit challenging the Kalshi approval remains pending, and an equity version adds SEC jurisdiction that may draw new objections from securities-side participants.
Summary
The Commodity Futures Trading Commission said Tuesday that perpetual futures on individual stocks can begin trading on U.S.-regulated exchanges for the first time, according to Bitcoin Magazine. In a statement, CFTC Chairman Michael S. Selig said the contracts, which he called "Equity Perps," were deemed approved under Commission Regulation 40.3 as security futures products. Listing venues must hold a CFTC designated contract market registration and a notice registration with the Securities and Exchange Commission as a national securities exchange for security futures. The statement names no exchange, lists no contracts, and sets no launch date; those details are expected from the designated contract markets themselves.
Perpetual futures have no expiration date. Instead, longs and shorts exchange periodic funding payments that keep the contract price tied to spot. The structure has dominated crypto derivatives for years, with most volume on platforms outside U.S. jurisdiction. The CFTC approved the first U.S.-listed bitcoin perpetual, Kalshi's BTCPERP, on May 29, and Kalshi launched it soon after. The same day, staff granted no-action relief allowing Coinbase Financial Markets to route U.S. clients into offshore perpetual and options liquidity. Kalshi added gold and silver perpetuals in September. Selig described the equity contracts as an extension of the May decision "beyond digital commodities and into traditional securities."
The legal basis predates the crypto products. The Commodity Futures Modernization Act of 2000 created a joint CFTC-SEC regime for security futures products, and the two agencies signed a memorandum of understanding on March 11 to coordinate rulemaking and enforcement. Selig cited that framework and repeated SEC Chairman Paul S. Atkins's description of security futures as stranded in a regulatory "no man's land" for lack of harmonization. Not all market participants accept the CFTC's reading. CME Group sued the agency in June over the Kalshi approval, arguing that a contract built on exchanged funding payments is a swap under Dodd-Frank rather than a future. That case is pending, and the equity extension brings SEC jurisdiction into the question.
The approval comes five days after the largest theft in crypto's history. On Oct. 29, attackers that TRM Labs and Chainalysis link to North Korea's TraderTraitor group drained about $6.3 billion from Binance's hot wallets in roughly 20 minutes. Binance reopened withdrawals on Sunday and says it has replenished about 95% of affected assets. Selig told CNBC on Oct. 30 that "these are unregulated offshore exchanges" lacking the safeguards of U.S. markets, and said the hack "proves our exact point" about the agency's October advance notice of rulemaking. That proposal would create a voluntary federal registration path for crypto exchanges with cybersecurity, proof-of-reserves, and custody requirements; Selig has said the CFTC cannot make registration mandatory without Congress. Selig framed the equity approval as a choice between regulated access and "being forced to turn to offshore, and often unregulated, venues."
Perpetual futures have no expiration date. Instead, longs and shorts exchange periodic funding payments that keep the contract price tied to spot. The structure has dominated crypto derivatives for years, with most volume on platforms outside U.S. jurisdiction. The CFTC approved the first U.S.-listed bitcoin perpetual, Kalshi's BTCPERP, on May 29, and Kalshi launched it soon after. The same day, staff granted no-action relief allowing Coinbase Financial Markets to route U.S. clients into offshore perpetual and options liquidity. Kalshi added gold and silver perpetuals in September. Selig described the equity contracts as an extension of the May decision "beyond digital commodities and into traditional securities."
The legal basis predates the crypto products. The Commodity Futures Modernization Act of 2000 created a joint CFTC-SEC regime for security futures products, and the two agencies signed a memorandum of understanding on March 11 to coordinate rulemaking and enforcement. Selig cited that framework and repeated SEC Chairman Paul S. Atkins's description of security futures as stranded in a regulatory "no man's land" for lack of harmonization. Not all market participants accept the CFTC's reading. CME Group sued the agency in June over the Kalshi approval, arguing that a contract built on exchanged funding payments is a swap under Dodd-Frank rather than a future. That case is pending, and the equity extension brings SEC jurisdiction into the question.
The approval comes five days after the largest theft in crypto's history. On Oct. 29, attackers that TRM Labs and Chainalysis link to North Korea's TraderTraitor group drained about $6.3 billion from Binance's hot wallets in roughly 20 minutes. Binance reopened withdrawals on Sunday and says it has replenished about 95% of affected assets. Selig told CNBC on Oct. 30 that "these are unregulated offshore exchanges" lacking the safeguards of U.S. markets, and said the hack "proves our exact point" about the agency's October advance notice of rulemaking. That proposal would create a voluntary federal registration path for crypto exchanges with cybersecurity, proof-of-reserves, and custody requirements; Selig has said the CFTC cannot make registration mandatory without Congress. Selig framed the equity approval as a choice between regulated access and "being forced to turn to offshore, and often unregulated, venues."
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