The CFTC approved prediction market platform Kalshi in late May to offer bitcoin perpetual futures, marking the first time this asset class is allowed in the United States. According to reports from crypto.news, Kalshi has since expanded the product to other cryptocurrencies and announced that its contracts generate more than $3 billion in notional volume in just over a week of beta testing. This historic approval represents the CFTC's commitment to bringing fast-growing crypto derivatives products onshore under U.S. regulatory oversight.
CFTC Chair Michael Selig has addressed four common criticisms of perpetual futures contracts, citing more than 100 public comments submitted during a 2025 consultation process as regulators continue expanding oversight of digital asset markets. According to reports from crypto.news, Selig addressed concerns that perpetual futures fall outside the legal definition of futures contracts because they lack a fixed expiration date. Selig clarified that neither the Commodity Exchange Act nor CFTC regulations explicitly define the term 'futures contract' in a way that requires a fixed expiration or delivery date.
The approval has drawn criticism from traditional futures industry leaders, notably CME Group CEO Terrence Duffy, who has criticized the high leverage and risk associated with perpetual futures. As reported by crypto.news, Selig responded to these concerns by stating that established market players will always fear new products, but emphasized the commission's goal to make sure contracts with no expiration date are available under U.S. oversight. The CFTC Chair explained that perpetual contracts operating under CFTC oversight remain subject to the same leverage restrictions that apply to other regulated futures products in the United States.
Addressing concerns about retail trader exposure, Selig rejected arguments that retail traders should be steered away from perpetual futures because they are difficult to understand. According to crypto.news, Selig noted that options are also complex products and emphasized that brokers are responsible for disclosure and for assessing whether customers are suitable to trade in those markets. The CFTC Chair denied that political pressure from President Donald Trump's administration plays a role in the approval, calling such suggestions absurd after questions arise because Donald Trump Jr. serves as a strategic adviser to Kalshi.
The approval comes as the CFTC continues to take a prominent role in digital asset regulation while Congress debates legislation that could redefine the responsibilities of the CFTC and SEC. As previously reported by crypto.news, the commission recently appointed former SEC crypto task force adviser Donald Battle as chief data innovation officer. The agency highlighted Battle's experience in blockchain analytics, financial investigations, artificial intelligence, and data science. Beyond cryptocurrency markets, the commission has remained active in disputes involving prediction markets and event contracts, recently challenging New Mexico officials over efforts to apply state gaming laws to contracts listed on Kalshi.
