CFTC's perpetual futures plan draws Wall Street fire over leverage

Michael Selig, who chairs the Commodity Futures Trading Commission, announced on November 3 that perpetual futures linked to individual stocks can start trading on qualifying US exchanges. The decision extends ground the regulator already broke in May, when it authorized Bitcoin perpetual futures — a model that had mostly lived on offshore crypto venues until then.

CME Group and a coalition that includes Cboe Global Markets and Citadel Securities are contesting that approach, arguing the current futures rulebook doesn't properly cover the products' risks. CME's position is that perpetuals behave more like swaps: they never settle on a fixed date and instead run on recurring funding payments, a structure that typically triggers different capital, reporting and collateral demands. The exchange's earlier legal challenge has folded into a wider fight over whether the right investor protections are being applied to crypto-style products.

The leverage math is the flashpoint. A trader who posts $1,000 at 20-times leverage controls $20,000 in market exposure, so a roughly 5% move against the position can wipe out the initial margin before fees and maintenance requirements are even counted. When collateral drops below the required level, platforms can automatically close the position — and that forced selling can snowball into the kind of liquidation feedback loop Bitcoin markets have seen before.

CME CEO Terry Duffy has warned repeatedly about leverage, saying wider access to perpetual contracts puts less experienced traders in the line of fire. Supporters of the CFTC's move counter that US oversight brings better transparency and customer protection than leaving the business concentrated offshore.

Newer platforms are already moving into the space. Kalshi has stepped into regulated perpetual futures, Coinbase is building out its US derivatives infrastructure after securing clearinghouse approval, and Webull has said it plans to offer crypto perpetual futures using Kalshi's rails — a setup that could open retail access further.