Perpetual futures in the US: the CFTC's first approved bitcoin perpetual and what it means

Perpetual futures, or “perps”, are huge in crypto: the Commodity Futures Trading Commission (CFTC) calls them a dominant form of crypto derivatives trading in global markets. But the market grew up mostly offshore. In May 2026, the CFTC approved a bitcoin perpetual for a US exchange and set out how it will treat others.

This guide explains how perpetuals work, what the CFTC approved in May 2026, its policy for other perpetuals, and the rules on foreign ones. For leverage and liquidation in general, see crypto leverage and derivatives rules.

What a perpetual contract is

The CFTC’s May 2026 policy statement describes perpetual contracts as derivatives that have no fixed expiration date, and which rely on a periodic funding rate to maintain price parity with the underlying asset’s spot price.

Ordinary futures work differently. They have an expiry date, and as it approaches, the futures price converges with the spot price. The CFTC notes that this convergence is what makes futures useful for hedging and price discovery. A perpetual never expires, so it needs another way to stay close to the spot price.

How the funding rate works

The mechanism the market settled on is the funding rate: a periodic payment between the long and short sides of the contract. Its direction and size are generally set by the difference between the perpetual’s market price and the spot price. According to the CFTC:

• when a perpetual trades above the spot price, traders with long positions make payments and those with short positions receive them;
• when it trades below, it’s the other way round;
• the payments create an incentive for traders to arbitrage away the gap, which keeps the contract’s price close to the spot price.

An example. Suppose you hold a long bitcoin perpetual position while the perpetual trades above the spot price. At each funding interval, you pay funding to traders on the short side. If the perpetual keeps trading above spot for weeks, those payments add up, on top of any trading fees, whatever happens to bitcoin’s price. If the perpetual trades below spot, you’d receive funding instead.

The size and frequency of funding payments depend on the contract and market conditions, so check the contract specifications before trading.

Why perpetuals grew up offshore

The CFTC says perpetuals have become a dominant form of crypto derivative trading in global markets, but that because of regulatory uncertainty about how to classify them in the US, the market largely developed outside the United States, with most trading on offshore venues.

It describes a series of steps toward a domestic framework:

• April 2025: staff requested public comment on perpetual-style derivatives, alongside a request on trading derivatives 24/7;
• July 2025: the President’s Working Group on Digital Asset Markets recommended that regulators let eligible participants access derivatives, including perpetuals, through regulated intermediaries;
• May 2026: the approval and policy statement described below.

May 2026: the first approved bitcoin perpetual

On 29 May 2026, the CFTC issued an order approving a bitcoin perpetual contract (BTCPERP) for listing on KalshiEX, a CFTC-registered designated contract market, as a futures contract that references the spot price of bitcoin.

At the same time, it issued a policy statement for other perpetuals. Its main points:

• Perpetuals on asset classes not covered by the bitcoin order should be submitted for the CFTC’s review and approval under its voluntary product approval process (Regulation 40.3).
• The CFTC lists examples of other asset classes, including agricultural products, precious metals, equities and narrow-based security indexes, each needing separate analysis. It says perpetuals are likely particularly ill-suited for agricultural products, and that those on equities would benefit from review by both the CFTC and the SEC.
• The statement doesn’t change the law or create obligations. It sets out the CFTC’s views, and each contract submitted will still be judged on its own terms.

Self-certification versus approval

US exchanges can normally list a new contract by self-certifying it (Regulation 40.2): the exchange itself determines that the product complies with the law and the CFTC’s rules. The policy statement says that, given how novel perpetuals are, the public interest is best served by having perpetuals on other assets reviewed and approved by the CFTC first.

The CFTC lists the benefits of prior review: transparency, engagement between its staff and exchanges while a product is designed, and greater regulatory clarity for the market and the public. It also says clear pathways matter so that new products can develop within regulated US markets rather than migrating to less regulated places abroad.

Perpetuals aren’t only a crypto story. In October 2026, CFTC staff gave exchanges time-limited no-action relief to convert existing “perpetual-style” futures on broad-based stock indexes into true perpetual futures by removing their expiry dates. The conditions included asking traders with open positions for feedback, giving advance notice and a chance to exit, and providing risk disclosures. That relief expired on 20 October 2026.

Why the CFTC is cautious

The policy statement explains that perpetuals raise novel and complex questions about market structure, customer protection and resilience during market stress. One example: exchanges may only list contracts that aren’t readily susceptible to manipulation. For an ordinary cash-settled future, the settlement price has to be reliable at one moment: expiry. For a perpetual, the price reference has to be reliable at every funding interval, without interruption, for as long as the contract exists.

Ordinary futures and perpetuals compared

Foreign perpetuals through a US broker

Also on 29 May 2026, CFTC staff responded to a request from Coinbase Financial Markets (CFM), a registered futures commission merchant (FCM), about its plan to offer certain crypto derivatives listed on its affiliated foreign exchange, Deribit FZE. Staff confirmed that the perpetuals described in its letter may be categorized as foreign futures, consistent with the bitcoin order.

Staff also said that, subject to conditions, they won’t recommend enforcement action against CFM for posting customers’ crypto and payment stablecoins with its foreign broker affiliate as margin, in circumstances where the foreign broker has obtained a right of re-use over those assets. If you use an arrangement like this, read the terms carefully: assets a broker can re-use aren’t simply sitting untouched in your name.

The risks don’t go away

Regulation changes where you can trade perpetuals, not how risky they are:

• Leverage cuts both ways. Small price moves can trigger liquidation.
• Funding costs can quietly eat into returns over time.
• Offshore platforms that deal with US customers outside the CFTC framework offer little protection. The CFTC advises checking registration before you trade. See how to check a trading platform with the CFTC and NFA.

For the wider rules on leveraged crypto in the US, see leveraged crypto trading and the CFTC.