Perpetual Futures Get Their U.S. Green Light

On successive days this spring, crypto-asset platforms Gemini Space Station and Payward proclaimed themselves “full stack” derivatives firms, having obtained the requisite array of Commodity Futures Trading Commission licenses.

Gemini’s climactic regulated-market designation, as a Derivatives Clearing Organization (DCO), was announced April 30. A day later, Payward, the parent of Kraken, filled out its stack by acquiring CFTC-licensed Bitnomial. Both had their sights set on perpetual futures – which were already being offered by Bitnomial.

Increasingly popular over the past several years in the 24/7 crypto realm and internationally – with trading volume by some estimates exceeding $90 trillion last year – so-called perps generated interest in the U.S. amid efforts to clarify regulatory treatment of virtual assets. In January, a month after being sworn in as CFTC chairman, Michael Selig vowed that the agency would “use the tools at its disposal to onshore perpetual and other novel derivative products so that they can flourish across both centralized and decentralized markets, subject to appropriate safeguards.”

A May 29 policy...