Trump administration's embrace of "perp" futures sets off risk alarms

Perpetual futures, or “perps,” let traders hold leveraged positions indefinitely and trade at any hour, with periodic funding payments replacing a fixed expiration date. Developed mainly in offshore crypto markets, they generated $61.7 trillion in trading volume in 2025. The US Commodity Futures Trading Commission approved crypto perps in May and recently approved contracts tied to individual stocks, bringing the products into a market backed by major fintech platforms. The Trump administration argues that US oversight is preferable to leaving activity offshore, while traditional exchanges and market participants warn that rapid expansion could strain safeguards built into conventional derivatives markets.

The dispute centers on whether perps should be regulated as futures or swaps. CME Group and an industry group involving Cboe and Citadel are challenging the CFTC’s decisions, arguing that perps’ ongoing funding payments make them more like swaps, which face stricter margin, capital and reporting rules. They say futures-style requirements may leave traders exposed to excessive leverage, counterparty failures and cascading liquidations during volatility. Continuous trading also requires exchanges, clearinghouses, brokers and customers to manage collateral and margin calls around the clock - a difficult fit with banking and staffing systems designed for standard market hours. New platforms say broader access can keep US investors and money onshore; incumbents see unresolved classification and infrastructure questions as threats to market stability.