CFTC clears path for true perpetuals in regulated US derivatives markets

In an attempt to facilitate the entry of true perpetual futures into regulated US derivatives markets, the Commodity Futures Trading Commission (CFTC) has issued a no-action letter on October 3.

In the no-action letter, the Division of Market Oversight stated that the CFTC will not take any enforcement actions against Coinbase Derivatives or any designated contract markets which eliminate expiration dates for eligible broad-based security index futures. On October 5, the CFTC declared the no-action relief associated with the trading structure of perpetual futures that have always been a part of offshore digital currency markets.

Removing the expiry turns a future into a perpetual

The approval was made following a request by Coinbase Derivatives CEO Jane Downey, which was filed on October 1. Usually, regulatory contract amendments made under Regulation 40.6 must wait for a period of 10 business days, but the CFTC ruled that eligible exchanges can implement the change in the expiration date right away.

However, there are limitations to this flexibility. The contracts should reflect the broad-based security indices and the exchanges must notify the traders with open positions before making amendments. Five-day notice should be given, the positions must be kept open under the similar conditions, and risk disclosures should be provided. Other aspects of the contract terms cannot be changed and exchanges must prove their compliance with this requirement. The deadline for this relief is October 20.

Contracts that already behaved like perpetuals

According to Coinbase, their products already work in a very similar way to true perpetual products. They employ regular funding rates to ensure the prices stay close to the market rates while having expiration dates reaching up to 25 years into the future. Doing away with the deadlines will do away with unnecessary contract rollovers and make the legal terms closer to the actuality of trading and use of the products.

The request letter mentioned six different perpetual-type futures: US500, Tech100, Defense10, AI10, China10, and Coin50. The important point is that Coinbase is not making changes to the products; it is simply getting rid of the expiry date, which was no longer in tune with how they have actually been traded.

Building on the CFTC’s digital-asset framework

This decision builds on previous actions taken by CFTC. In May, the Commission authorized perpetual futures with underlying assets that have deep and active spot markets, such as bitcoin. Later, the CFTC indicated that the futures market for other asset classes would still require separate review.

This is significant because the CFTC is no longer just handling crypto-based perpetuals. Its independent guidance on 24/7 trading also indicates that the agency is broadening its perspective on markets that function on an around-the-clock basis.

Coinbase’s request and the race for 24/7 rails

Coinbase said the normal review period could leave economically similar products trading with different expiry terms, creating market confusion. The move also fits Coinbase’s broader 24/7 market strategy, as exchanges compete to build markets that operate beyond traditional trading hours.

Demand is already substantial. CoinGecko found that RWA perpetual trading volume rose from $230 million in early 2025 to $347.17 billion in May 2026.

The offshore liquidity question, and the leverage it carries

The bigger question is whether clearer US rules can pull more perpetual trading from offshore and decentralized venues into regulated domestic markets. If that happens, more liquidity could move onshore, but so could the leverage risks that come with perpetual contracts.

Galaxy Research said crypto futures open interest, including perpetuals, fell 3.08% quarter over quarter to $103.2 billion at the end of Q2 before rebounding to about $114 billion by late July.

Galaxy mentioned the leverage retraction was smooth. Despite that, perpetual contracts can still be risky when financing rates fluctuate, most traders take the same positions, and prices decline, resulting in liquidations.