The CFTC Says Perpetual Futures on Stocks Can Trade in America, and Gets Sued Over It

The Commodity Futures Trading Commission has opened the way for perpetual futures on individual stocks to trade on American venues, CoinDesk reported. Chair Michael Selig framed it as giving domestic traders a regulated alternative to offshore venues that are frequently unregulated, and said access would run through futures exchanges that are also registered with the Securities and Exchange Commission, according to The Defiant.

What a perpetual future is

A perpetual future is a derivative with no expiry date. Instead of settling on a fixed day, it holds its price near the underlying asset through a funding rate, a small payment exchanged between long and short holders at regular intervals. When the contract trades above the reference price, longs pay shorts, and the imbalance pulls it back. The design came out of crypto, where it is now the dominant form of leveraged trading, and it has never existed as a regulated product on an American equity reference.

That is what has changed. A trader who wants continuous leveraged exposure to a single stock has, until now, had to choose between dated futures, options, or an offshore venue offering the perpetual structure without US oversight. Selig's position is that the third option is the one regulation should compete with.

The lawsuit arrived with the clearance

A group backed by Citadel Securities and other firms has sued the CFTC over the move, CoinDesk reported, arguing that a perpetual contract referencing a single equity belongs under the Securities and Exchange Commission rather than the derivatives regulator. The agency had earlier cleared the path for the crypto version of the product without comparable resistance.

The jurisdictional line being tested is old. A future on a broad stock index is squarely a CFTC product. A future on one company's shares is a security future, historically governed jointly, and the plaintiffs' case is that calling it perpetual does not move it. Selig's route, listing on venues registered with both agencies, looks designed to blunt exactly that argument, which is a hint that the agency expected it.

Venues are not waiting for the ruling

Kraken responded publicly and briefly to Selig's remarks, signalling that a product is close, The Defiant reported. That is the shape of the next few weeks: exchanges will move towards launch while the legal question of who owns the category is still live, because the first venue to list a regulated equity perp in America takes the order flow that offshore platforms have been collecting for years.

For anyone watching tokenized equities, this matters more than it looks. Perpetual futures and stock tokens are competing answers to the same demand, which is exposure to a share outside the hours and the plumbing of the primary market. A perp needs no custody, no transfer agent and no issuer consent, since it references a price rather than a share. The issuers now objecting to tokenized listings have no equivalent lever here.

What settles this

The suit will determine whether equity perps sit with the CFTC, the SEC, or both, and that determination sets the registration burden for every venue that wants to list one. Until then the clearance stands and exchanges can build against it, which is the practical position regardless of how the case eventually reads.