The U.S. Commodity Futures Trading Commission has responded to four common criticisms of perpetual futures contracts, citing more than 100 public comments submitted during a 2025 consultation process as regulators continue expanding oversight of digital asset markets.
Summary
- CFTC Chair Michael Selig said perpetual futures contracts do not require a fixed expiration date under existing U.S. law or regulatory interpretations.
- Selig stated that CFTC regulated perpetual futures face the same leverage limits as other U.S. futures contracts, rejecting claims that they permit 250x leverage.
- More than 100 public comments were submitted during the CFTC’s 2025 consultation on perpetual contracts, while the agency said funding rates help keep prices aligned with spot markets.
According to a post published on X by CFTC Chair Michael Selig, several misconceptions have emerged around perpetual futures contracts and the agency’s recent approvals of such products, including concerns related to contract duration, leverage, public consultation, and funding rates.
Among the issues addressed was the argument that perpetual futures fall outside the legal definition of a futures contract because they do not have a fixed expiration date. Selig said neither the Commodity Exchange Act nor CFTC regulations explicitly define the term “futures contract” in a way that requires a fixed expiration or delivery date.
Instead, he said the criteria used to determine whether an instrument qualifies as a futures contract come from court decisions and commission interpretations, neither of which requires a contract to expire on a predetermined date.
CFTC defends leverage limits and funding mechanism
Attention has also focused on leverage after some critics claimed the agency had approved a product that would allow U.S. traders to access leverage of up to 250x through the recently approved BTCPERP contract.
Addressing those concerns, Selig said extreme leverage has historically been associated with offshore trading venues rather than the perpetual futures structure itself. Perpetual contracts operating under CFTC oversight, he said, remain subject to the same leverage restrictions that apply to other regulated futures products in the United States.
Questions surrounding industry participation were also raised following the approval process. In response, Selig pointed to an April 2025 request for comment covering both perpetual contracts and 24/7 trading, which drew more than 100 responses from market participants, including numerous firms already registered with the commission.
Funding rates, another frequently debated feature of perpetual futures, received separate attention in the statement. According to Selig, critics have argued that the mechanism creates high costs for traders and encourages harmful market behavior.
His explanation was that carrying a position in traditional futures contracts can generate similar annualized costs once traders account for the expenses associated with repeatedly opening and rolling expiring contracts. He added that funding rates help keep perpetual futures aligned with the underlying spot market rather than encouraging misconduct.
The comments arrive as the CFTC continues to take a prominent role in digital asset regulation while Congress debates legislation that could redefine the responsibilities of the CFTC and SEC.
As previously reported by crypto.news, the commission recently appointed former SEC crypto task force adviser Donald Battle as chief data innovation officer. In announcing the hire, the agency highlighted Battle’s experience in blockchain analytics, financial investigations, artificial intelligence, and data science.
Beyond cryptocurrency markets, the commission has remained active in disputes involving prediction markets and event contracts. Court filings cited by the agency show it recently challenged New Mexico officials over efforts to apply state gaming laws to contracts listed on Kalshi, arguing that federally regulated event contracts fall under CFTC jurisdiction.
At the same time, the regulator is collecting public feedback on a proposed framework for sports event contracts, a process that could influence how federal authorities oversee sports-related prediction markets in the future.
