DRW CEO Don Wilson says regulators misunderstand perpetual futures
Wilson argued perpetuals should be regulated by their economic substance as futures, saying leverage, auto-deleveraging, 24/7 trading and continuous margining reflect exchange design rather than the contract itself.
DRW founder and CEO Don Wilson argued that perpetual futures are best understood as futures contracts without expiration dates and said U.S. regulators should classify them by economic substance as futures rather than swaps. He said features often associated with crypto perps, including high leverage, auto-deleveraging, 24/7 trading and continuous margining, are choices made by exchanges rather than inherent characteristics of the product. Wilson said the main benefit of perpetual futures is eliminating the need to roll expiring contracts, which can reduce transaction costs, market impact and slippage while keeping exposure closer to the front of the curve. His remarks come as interest in regulated U.S. perpetual futures expands beyond crypto, including Kalshi's proposal to broaden its offerings to precious metals.
- perpetual futures: Futures contracts that do not expire, allowing continuous exposure without rolling into new contracts.
- auto-deleveraging: A mechanism that cuts winning positions when losing traders cannot fully cover their losses.
- roll slippage: Costs or pricing differences incurred when shifting exposure from an expiring futures contract into a new one.