How regulators will classify crypto perpetuals in the US

On June 18 the Commodity Futures Trading Commission and the Securities and Exchange Commission opened a 60-day public comment period asking how to classify crypto perpetuals, swaps, mixed swaps and event contracts. The request asks which regulator should oversee each product, which venues may list them, and which margin, clearing and reporting rules should apply.

The agencies asked for input on product definitions under Title VII of the Dodd-Frank Act, the framework that divides oversight between the CFTC and the SEC. The request specifically seeks views on whether cash-settled perpetual contracts that reference cryptocurrency prices fit as futures, swaps, foreign futures, security futures, mixed swaps or another category, and on exclusions from the swap definition and alternative compliance approaches. The comment period remains open for 60 days after the notice appears in the Federal Register. Comments submitted to the SEC docket will be posted publicly.

Classification determines practical rules. A product treated as a futures contract can be listed on U.S. futures exchanges and follow the CFTC’s regime for margin, clearing and surveillance. If a product is treated as a swap or a security-linked instrument, different registration, reporting and broker-dealer or swap-dealer obligations can apply and retail access may be limited. The agencies also asked how labeling could affect liquidity, price discovery and hedging.

The request follows recent agency actions and filings. On May 29 CFTC staff approved KalshiEX’s BTCPERP under Regulation 40.3 as a futures contract. The approval described a cash-settled, continuously marked-to-market Bitcoin-referenced contract with funding payments and no fixed expiration. A competing market participant has filed a lawsuit challenging that classification.

On the same day, CFTC staff confirmed a foreign-futures access route and issued no-action relief tied to a U.S. affiliate’s relationship with an offshore derivatives platform. That relief covered certain transfers of customer-owned crypto and stablecoin margin. Those actions illustrate that multiple on- and offshore paths for crypto perpetuals are already being used.

Event contracts are part of the agencies’ review. On June 10 the CFTC published a proposal for event contracts tied to specified activities, including gaming, unlawful conduct, war, terrorism and assassination, and proposed a structured review process for those instruments. Event products and crypto perpetuals can overlap because both can be cash-settled, trade continuously and be marketed to retail customers under federal derivatives rules.

The agencies referenced a March interagency memorandum that committed the CFTC and SEC to coordinate on product definitions, alternative compliance and cross-market oversight while preserving each agency’s statutory authority. The agencies noted that public comments can inform guidance and rulemaking but cannot change the statutes that allocate jurisdiction.

Exchanges, clearing firms, trade groups, crypto-native trading venues, prediction-market operators, state officials, gaming groups and investor-protection advocates are expected to submit comments. Market participants can provide technical input such as margin and liquidation mechanics, clearing stress scenarios, venue listing processes and legal arguments about whether certain event contracts fall under federal derivatives law or state gambling rules. The agencies will review the comments as they consider future guidance and potential rule changes.