CFTC clears Coinbase for U.S. crypto perpetual futures as CME CEO warns of risks

The CFTC’s approval of the first U.S.-regulated crypto perpetual futures contracts for Coinbase and Kalshi has opened a market long dominated by offshore venues and reignited debate over how far the products should spread across U.S. derivatives markets. Perpetual futures do not expire and can carry leverage of up to 50-to-1, making them a popular but high-risk trading instrument in crypto. CME Group CEO Terry Duffy called perpetual futures "a disaster waiting to happen" on June 4, warning that allowing U.S. investors into the products could destabilize financial markets. He said retail traders often do not understand how funding costs erode positions or how auto-liquidation systems can force them out during sharp price moves, and argued the CFTC moved too quickly on a novel and complex product. The approvals have also rattled listed exchange operators. Cboe Global Markets fell 9% on June 2, while CME Group and Intercontinental Exchange each lost about 4%, as investors weighed whether regulators could eventually allow perpetual futures in other asset classes such as equities and commodities. Analysts at Raymond James and RBC said the near-term threat to incumbent exchanges may be limited because perpetuals are geared more toward retail speculation than institutional hedging, while CME said 85% to 90% of its volume comes from institutional clients with little apparent use for the contracts.