CFTC to allow crypto-linked perpetual futures soon

Speaking at the Milken Institute’s Future of Finance conference at Washington on Tuesday, Commodity Futures Trading Commission (CFTC) chair Michael Selig (pictured) said that the US has to recapture liquidity that has migrated to platforms in Asia, Europe and the Bahamas.

“We’re working toward getting perpetual futures - true perpetual futures, not long-dated contracts - here in the US in the next month or so," said Selig.

He said that the agency is working to create a framework for these contracts and ensure that right investor protections are in place.

This comes after Selig in January unveiled an ambitious program of reforms that opens the way for “true perpetual” derivatives by providing transparent and workable frameworks.

Selig also said that the agency will soon advance a proposal for regulating prediction markets.

He added that CFTC has submitted an "advance notice of proposed rulemaking" (ANPR) to the president's ⁠budget office for review.

"The more we try to block these markets, we saw with crypto, it just goes offshore,” said Selig.

"So my view on this stuff is that we've got to set the right rules and regulations for it here in the United States, or otherwise, we're just going to have black markets offshore."

This comes after Selig launched into a forceful defence of the CFTC’s authority over US prediction markets last month in a video statement as state authorities challenge event contracts.

Separately, the Commission has begun reshaping its policy framework. In February, it withdrew its 2024 event contracts proposal and rescinded related staff guidance, signalling that a revised approach will follow.

The CFTC chair also said that the agency is closely working with US Securities and Exchange Commission Chairman Paul Atkins on Project Crypto, a joint initiative to align on federal oversight of digital assets.

In January, the CFTC and the SEC launched Project Crypto to align federal supervision of crypto asset markets, clarify jurisdictional boundaries and reduce regulatory fragmentation, alongside legislative efforts to formalise the CFTC’s position in market structure reform.