Trump administration's embrace of "perp" futures sets off risk alarms for Wall Street stalwarts

The Trump administration's push to bring offshore perpetual futures onshore is drawing sharp objections from incumbent Wall Street exchanges and market participants, according to Reuters interviews with four exchange executives and other key market players. Perps, which trade around the clock, have no expiration date, are typically leveraged (sometimes up to 50 times), and are predominantly traded by retail investors. According to data provider CryptoQuant, crypto perps trading volume reached $61.7 trillion in 2025, up 29% from 2024, with much of that activity concentrated on Asian-based platforms such as Binance and Hyperliquid.

The Commodity Futures Trading Commission's May decision to formally approve US-listed crypto perps drew alarm from traditional exchanges, as Kalshi, Coinbase, Robinhood and other fintech firms moved into the market. The CFTC later approved single-stock equity perps. CFTC Chair Michael Selig has said it is important to maintain US oversight of the nascent market to protect American investors. CME Group is suing the CFTC to overturn the May decision, arguing perps were wrongly classified as futures and that this creates unfair competition while downplaying risks. CME chief executive Terry Duffy said the classification has "muddied the waters" and that ambiguity could hurt the business. A group representing Cboe Global Markets and Citadel Securities has sued to reverse the equity perp approval on similar grounds. The CFTC declined to comment on the concerns and has previously said CME had chosen "lawfare" over competing in the new market.

Exchange executives argue that perps are more akin to swaps, which face stricter margin, capital and reporting requirements and are less accessible to retail investors. Because perps lack expiration and involve ongoing funding payments, they meet the Dodd-Frank Act's 2010 definition of a swap, they say. The CFTC counters that perps have futures-like features and that the funding mechanism substitutes for expiration. Rob Hocking, global head of derivatives at Cboe, said product classification "risks becoming a competitive tool" and that the situation is bad for markets, calling for resolution "in short order." Kalshi's head of institutional business, Andy Ross, argued it is better for such products to trade inside the US regulatory perimeter than offshore.

Executives also flagged operational risks. Futures-style margin may be inadequate for swap-like products, raising counterparty and liquidity risks in volatile periods, and automatic liquidation mechanisms could amplify stress; such mechanisms drove the largest-ever liquidation of bitcoin positions last year. The CFTC has emphasized enhanced customer disclosures about auto-liquidation during extended hours. Round-the-clock trading also strains exchanges, clearing houses and brokers that must manage collateral outside normal banking hours. CME recently shelved a proposed 24/7 crude oil futures contract, mainly because commercial clients were unwilling to staff weekend trading desks. Thomas Restout, chief executive of B2C2, said US financial infrastructure "is not yet fully equipped for true 24/7 markets." Analysts expect the dispute to draw further scrutiny as Democrats seek greater oversight next year.