Key Takeaways
- • The Blockchain Association filed formal comments with the SEC and CFTC urging the agencies to establish a joint regulatory framework for equity perpetuals, currently traded exclusively offshore and unavailable to US investors.
- • The association argues that existing regulatory authority—specifically the joint framework for security futures and CEA Section 4(c) authority for novel derivatives—is sufficient to bring equity perpetuals onshore without requiring new legislation.
- • Equity perpetuals currently generate price discovery and trading activity outside US markets, depriving American investors of product access and regulatory protections that domestic oversight would provide.
- • The proposed framework prioritizes transparency, auditability, surveillance, customer-asset protection, financial integrity, and operational resilience, with technology-neutral rules based on regulatory outcomes rather than specific infrastructure requirements.
- • CFTC Chairman Michael Selig has characterized perpetual futures as "widely used tools for risk management and price discovery" with "clear market demand," signaling receptivity to regulatory clarification.
Summary
The Blockchain Association has escalated its push to bring equity perpetuals into US-regulated markets by filing coordinated comments with both the SEC and CFTC, arguing that regulatory ambiguity is needlessly driving innovation and trading activity offshore. Equity perpetuals—derivative products that allow leveraged exposure to equities—currently operate exclusively outside the United States, creating what the association characterizes as a significant gap in regulatory coverage and investor protection.
In its filing, the Blockchain Association emphasized that the two agencies already possess the legal authority necessary to regulate these products without congressional action. The group specifically recommended applying the existing joint framework established for security futures and leveraging CFTC authority under Commodity Exchange Act Section 4(c) for novel derivatives when warranted. Rather than prescriptive rules tied to specific technologies, the association advocated for outcome-based regulation that emphasizes core principles: transparency, auditability, market surveillance capabilities, customer-asset segregation, financial integrity, and operational resilience.
The association's position reflects broader frustration within the industry that regulatory uncertainty is creating competitive disadvantages for US markets. By remaining offshore, equity perpetuals escape US market oversight mechanisms while generating price discovery signals that domestic exchanges and investors cannot access. The association argued that blockchain-based market infrastructure can effectively support the proposed regulatory outcomes, positioning distributed ledger technology as compatible with—rather than opposed to—traditional surveillance and consumer protection standards.
Recent statements from CFTC leadership suggest receptiveness to the proposal. CFTC Chairman Michael Selig publicly characterized perpetual futures as legitimate "risk management and price discovery tools" with demonstrable market demand, language that suggests openness to regulatory pathways. The agencies are reportedly planning a joint roundtable on perpetual contracts scheduled for September 29, indicating active coordination on the issue.
The Blockchain Association's approach emphasizes that regulatory clarity, not permissiveness, is the objective. By proposing rules grounded in established regulatory principles and existing inter-agency frameworks, the industry group is attempting to reframe equity perpetuals as manageable products worthy of domestic market access rather than exotic instruments requiring indefinite offshore status.
In its filing, the Blockchain Association emphasized that the two agencies already possess the legal authority necessary to regulate these products without congressional action. The group specifically recommended applying the existing joint framework established for security futures and leveraging CFTC authority under Commodity Exchange Act Section 4(c) for novel derivatives when warranted. Rather than prescriptive rules tied to specific technologies, the association advocated for outcome-based regulation that emphasizes core principles: transparency, auditability, market surveillance capabilities, customer-asset segregation, financial integrity, and operational resilience.
The association's position reflects broader frustration within the industry that regulatory uncertainty is creating competitive disadvantages for US markets. By remaining offshore, equity perpetuals escape US market oversight mechanisms while generating price discovery signals that domestic exchanges and investors cannot access. The association argued that blockchain-based market infrastructure can effectively support the proposed regulatory outcomes, positioning distributed ledger technology as compatible with—rather than opposed to—traditional surveillance and consumer protection standards.
Recent statements from CFTC leadership suggest receptiveness to the proposal. CFTC Chairman Michael Selig publicly characterized perpetual futures as legitimate "risk management and price discovery tools" with demonstrable market demand, language that suggests openness to regulatory pathways. The agencies are reportedly planning a joint roundtable on perpetual contracts scheduled for September 29, indicating active coordination on the issue.
The Blockchain Association's approach emphasizes that regulatory clarity, not permissiveness, is the objective. By proposing rules grounded in established regulatory principles and existing inter-agency frameworks, the industry group is attempting to reframe equity perpetuals as manageable products worthy of domestic market access rather than exotic instruments requiring indefinite offshore status.
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