.png){kind=logo}
The Trump administration's support for perpetual futures trading in the US is raising concerns across traditional Wall Street exchanges. Financial industry executives warn that the rapidly expanding products could expose investors to higher risks and weaken safeguards in the multitrillion-dollar derivatives market.
Perpetual futures, commonly known as ‘perps’, allow traders to hold positions without an expiry date. Unlike conventional futures contracts, they trade around the clock. These products are generally leveraged, with some platforms offering exposure of up to 50 times the initial investment.
The market has expanded rapidly beyond cryptocurrency trading. According to data provider CryptoQuant, global crypto perpetual futures trading volume reached USD 61.7 trillion in 2025, marking a 29% increase from the previous year.
The US Commodity Futures Trading Commission (CFTC) approved listed crypto perpetual futures in May. It also cleared single-stock equity perpetual futures last week. Platforms such as Coinbase, Robinhood and Kalshi have entered the growing market.
Traditional exchanges have questioned the CFTC's decision to classify perpetual contracts as futures rather than swaps. CME Group has filed a lawsuit seeking to overturn the May approval. An industry group representing Cboe Global Markets and Citadel Securities has also challenged the regulator's approval of equity perpetual futures. CME Chief Executive Terry Duffy criticized the regulatory uncertainty surrounding the products.
"I think they've muddied the waters here significantly," Duffy said. "Anytime you have ambiguity in markets...that could hurt the business."
Traditional exchanges argue that perpetual futures share important characteristics with swaps. They say the products should face stricter capital, margin and reporting requirements under existing financial regulations.
Wall Street executives are particularly concerned about the risks associated with high leverage and automatic liquidations. These systems close traders' positions when their available margin falls below required levels. During sharp market movements, mass liquidations could increase volatility and deepen losses. The CFTC has already advised futures commission merchants to strengthen customer disclosures about automatic liquidation features during extended trading hours.
Continuous trading also creates operational challenges. Exchanges, clearing houses and brokers must manage positions and margin requirements throughout the day and night. Traditional financial institutions may struggle to move sufficient cash and collateral outside normal banking hours. Thomas Restout, chief executive of institutional crypto market maker B2C2, highlighted the infrastructure challenge.
"The traditional financial market infrastructure in the US is not yet fully equipped for true 24/7 markets," Restout said.
The regulatory dispute could intensify next year. Democrats are expected to increase scrutiny of emerging financial products after gaining control of Congress in the recent midterm elections. The CFTC has defended its approach, arguing that perpetual futures have characteristics similar to conventional futures. The regulator has also said that exchanges should compete in the market rather than challenge its decisions through litigation. The outcome of the legal disputes could shape how perpetual futures expand across US financial markets.
Also Read: Kevin Warsh Launches Fed Task Forces to Review AI and Monetary Policy