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 statement, concurrent with an initial approval of bitcoin perpetual futures on the Kalshi platform, represented what Selig termed a “workable pathway for crypto-asset perpetuals to exist in a compliant manner in the United States.”
Kraken promptly announced plans for the “first CFTC-regulated perpetual futures for U.S. traders” within 30 days. Kraken and Coinbase brought out “pre-IPO perps” starting with SpaceX. Kalshi’s perps volume surpassed $1 billion less than a week after launch.
Perps mimic traditional futures contracts, except that they do not expire or are, in practice, long-dated. The term was 25 years on the “first-ever U.S. perpetual futures contracts” that Bitnomial listed for institutional trading in April 2025. Coinbase’s bitcoin and ether contracts and CME Group’s “perp-like” Spot-Quoted futures were launched last summer with five-year expiries. Cboe Global Markets‘ Continuous Futures launched in December and expire in 10 years.
Weekly perps exchange notional volume (left scale, includes leverage) and open interest (right scale). Source: DefiLlama.
“This allows for continuous trading without the need to roll over positions as contracts near expiration, reducing costs and complexity for traders,” according to an explainer on the Binance website. “In the crypto ecosystem, perps are cash-settled, meaning settlements occur in currency [e.g., USDT stablecoin] rather than the actual asset, which simplifies operations on exchanges. Their popularity has surged . . . driven by high liquidity and the ability to trade with leverage up to 200x on some platforms.”
During CME’s April earnings call, chairman and CEO Terrence Duffy contended that perps are inherently speculative; they do not result in a literal, future delivery at the end of the contract and therefore fall outside the Commodity Futures Modernization Act of 2000. “Contracts are not designed for speculators or pure retail,” Duffy said, as reported by Markets Media.
Duffy was more blunt on June 4 at a Piper Sandler conference, seeing a largely retail, leveraged “speculation market” as “a disaster waiting to happen.”
At the Bernstein Strategic Decisions Conference on May 27, Intercontinental Exchange Chairman and CEO Jeffrey Sprecher said exploratory discussions were taking place with onchain trading venue Hyperliquid. He expressed concern about a competitive imbalance in perps and hope that regulators would ensure a level playing field, according to The Block.
On May 22, two-and-a-half months after ICE made a strategic investment in OKX, that blockchain platform operator announced plans to launch perpetual futures based on ICE's Brent Crude and WTI Crude energy benchmarks.
“By integrating globally recognized commodity benchmarks into regulated digital markets, OKX and ICE are establishing new pathways for users to access some of the world’s most important energy markets,” the companies said.
“Perpetual futures have become a cornerstone of derivatives trading, accounting for over 93% of crypto derivatives volume as of recent data,” Binance says.
Offshore perps trading, driven by crypto and, more recently, commodities, stocks and other assets, started among “systematic” market makers and hedge funds, said Denis Dariotis, founder and CEO of digital-asset infrastructure company GoQuant. It transitioned “to more of an institutional presence where larger asset managers are using perps to manage risk,” he said, and “over 80% of crypto market volume is now done in perps rather than spot.”
Weekly RWA (real-world asset) perps volume data from Coindesk shows the equities category overtook commodities (excluding oil) in late May. “This implies that crypto-venue derivatives are increasingly used for 24/7 equity exposure, with commodities now the episodic, event-driven slice.”
The perps exchange of EDXM International in Singapore went live in July 2025 with contracts across 44 trading pairs including bitcoin, ether, solana and Ripple’s XRP.
Tony Acuña-Rohter, CEO of the Chicago-headquartered, institutionally-backed parent EDX Markets, said the firm aims for a CME-like model that comprises exchanges and clearinghouses. Some larger institutions resembling U.S. asset managers trade over EDXM International, but many were still monitoring developments, he observed recently, adding, “Once there’s more clarity around perps and permitted access for potential engagement, we believe U.S. persons will prefer to trade with their existing brokers or exchanges that follow traditional market structure, like EDX.”
Tony Acuña-Rohter, EDX
Another perps exchange directed at the institutional market, AX, was launched in October 2025 by a Bermuda affiliate of Architect Financial Technologies, whose founder and CEO is Brett Harrison, formerly president of the defunct FTX US. A $35 million Series A funding, led by Miami International Holdings and Tioga Capital, supported AX. In May, Architect acquired IMX Health, a CFTC Designated Contract Market, to establish Architect’s American Innovation Exchange as “the first CFTC-regulated exchange for futures and options trading on compute costs tied to multiple GPU vendors and models, as well as other inputs in the artificial intelligence supply chain.”
In February, tokenization platform Ondo Finance announced Ondo Perps for non-U.S. access to stocks, funds and commodities, with the ability to use tokenized securities as collateral.
More established exchanges are likely to allow considerable leverage for full-fledged perps – typical for derivative products – but less than many offshore exchanges. Cboe’s Continuous Futures for bitcoin and ether require initial margin of 18.42% and 32.61%, respectively, according to a spokesperson, or leverage of approximately 5.4x and 3x.
Coinbase International Exchange permits leverage between 4x and 50x for bitcoin or ether, depending on the position limit. It was up to 5x on the pre-IPO contracts, compared to 10x on standard stock perpetual futures and 20x on ETF products. Ondo Perps leverage was up to 20x.
Given the infrequent expiries, individual exchanges provide funding-rate mechanisms, usually several times daily, to reconcile the difference between the future and the underlying spot price. Market volatility fueling sudden funding-rate movements can require significant and potentially problematic collateral exchanges between long and short parties in the perp contract.
“Perps are generally offered by offshore, unregulated platforms that offer high leverage while posing significant risks, including the potential for large losses,” according to the CME.
In a March report, S&P Global noted that on October 10, 2025, bitcoin prices fell by 8% in 20 minutes, a flash crash characterized by “thin liquidity, high leverage in bitcoin perpetuals, and cascading liquidations.”
Denis Dariotis, GoQuant
CME’s Spot-Quoted futures’ (SQF) total financing adjustment (TFA) is calculated once a day and, similar to perps’ funding rating, helps align SQF with underlying spot prices. It says, however, that “unlike sentiment-driven funding rates on the other exchanges, the TFA is derived from the transparent and publicly available CME Group futures basis.”
Aligning with “the nonstop nature of crypto markets,” CME went to 24/7 cryptocurrency futures and options trading on May 29. Average daily volume at the time of the February announcement, year to date, was 407,200 contracts, up 46% year-over-year.
Clearing firms can “act as a shock absorber where they can manage any client liquidations in a more managed way without necessarily going immediately into the market with transactions that could cause more distress,” said a Cboe spokesperson.
EDX’s “traditional finance” risk controls mitigate cascading liquidations, according to Acuña-Rohter. They include an external price index that values account positions separately from its own market activity; warning participants of potential liquidations; and controls inhibiting runaway algorithmic trading.
GoQuant mitigates cascading liquidations in GoDark, a decentralized dark pool that will launch this summer, by effecting partial liquidations and leverage limits in its funding-rate mechanism. CEO Dariotis noted that auto-deleveraging built into exchanges’ funding-rate mechanisms can exacerbate forced sales.
“GoDark’s dynamic margining system prevents users from taking excessive leverage when market liquidity cannot support it,” he explained, “while partial liquidations reduce positions gradually rather than all at once. That limits cascading effects during periods of market stress.”
Jeffrey Kutler of GARP contributed reporting for this article.