TLDR
- CFTC Chair Michael Selig confirms US regulatory framework for crypto perpetual futures will arrive “within the next month or so”
- New regulations will establish structure, registration standards, and oversight protocols for cryptocurrency derivatives
- Bulk of crypto perpetual futures activity remains offshore due to existing regulatory uncertainty
- CFTC simultaneously developing prediction market guidance expected in the “near future”
- Digital Asset Market Clarity Act continues facing delays amid negotiations between lawmakers, industry stakeholders, and White House officials
The United States Commodity Futures Trading Commission is moving forward with plans to establish regulations for cryptocurrency perpetual futures contracts, CFTC Chair Michael Selig revealed this week.
Selig delivered these remarks during a Milken Institute panel discussion held in Washington, DC on Tuesday. SEC Chair Paul Atkins joined him on the panel.
Perpetual futures represent a derivative instrument allowing traders to speculate on cryptocurrency valuations without contracts having expiration dates. While these instruments enjoy widespread adoption across international crypto markets, they’ve lacked definitive regulatory oversight within American borders.
Selig indicated the CFTC aims to bring “true perpetual futures” into the United States regulatory framework. His projected timeline places implementation within the coming month or so.
He placed responsibility for the existing regulatory void on the previous administration. According to Selig, past regulatory ambiguity drove companies and market liquidity to foreign jurisdictions.
The forthcoming regulatory framework will establish parameters for contract structure and outline registration requirements that firms must satisfy. The CFTC intends to provide clarity for market participants operating domestically.
Prediction Markets Also Getting Guidance
Beyond perpetual futures, the CFTC is developing guidance for prediction markets. Selig indicated that standards governing event-based contracts would be released in the near future.
Prediction market platforms including Kalshi and Polymarket have encountered enforcement actions at state levels. The CFTC has contested these actions, asserting federal jurisdiction over event contracts.
A coalition headed by Rep. Mick Mulvaney is advocating for stricter oversight of prediction markets. Their argument centers on concerns that these platforms confuse the distinction between investing and gambling.
The CFTC continues asserting these contracts belong under federal oversight as commodity-based derivatives.
Crypto Market Structure Bill Still Stalled
Atkins informed panel attendees that the SEC requires statutory clarity from Congressional legislation. He referenced a Supreme Court decision from two years prior that diminished deference to federal agencies, thereby increasing vulnerability to legal challenges.
“There’s only so much you can do without legal certainty from Congress,” Selig said.
The Digital Asset Market Clarity Act, legislation designed to partition regulatory authority between the SEC and CFTC, continues languishing without progress. Negotiations persist among cryptocurrency industry organizations, banking sector representatives, and White House officials.
As of Tuesday, the Senate Banking Committee had yet to schedule a markup session for consideration of the bill.
The White House recently conducted discussions with industry leaders regarding stablecoin yield. Whether these conversations would catalyze legislative advancement remained uncertain.
The CFTC presently operates with just one Senate-confirmed commissioner. Selig stands as the only confirmed member, leaving four positions vacant with no nominations yet announced.
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