Kalshi and Coinbase both receive CFTC approval—has the crypto industry entered the most regulator-friendly era?

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Written by: Ma He, Foresight News

On May 29th, the U.S. Commodity Futures Trading Commission (CFTC) issued two landmark measures: officially approving KalshiEX, LLC (Kalshi) to list Bitcoin perpetual contracts. Additionally, the CFTC issued a no-enforcement letter to Coinbase, allowing Coinbase to offer certain perpetual futures products to U.S. customers through its subsidiary.

The CFTC released the "Perpetual Contract Listing Policy Statement," providing a clear regulatory framework for the listing of perpetual products in regulated markets. This combined action signifies a key step in moving U.S. crypto derivatives regulation from a long-standing gray area toward a compliant pathway for truly perpetual contracts.

Kalshi and Coinbase Receive Regulatory Approval

The CFTC’s review determined that Kalshi’s Bitcoin perpetual contract complies with the core principles of the Commodity Exchange Act and DCM (Designated Contract Market) standards, including market depth and liquidity of the underlying Bitcoin spot market, contract design, and risk management capabilities. The approval order requires Kalshi to operate in compliance continuously and explicitly states that the design of perpetual contracts "may not be suitable for all asset classes," encouraging other market participants to communicate with regulators and submit formal approval applications for different underlying assets.

Furthermore, the CFTC’s Market Participants Division issued an explanatory and no-action letter to registered futures commission merchant Coinbase Financial Markets (CFM), permitting it to offer crypto options and perpetual contracts listed on Deribit to U.S. users. The letter confirms that the aforementioned perpetual contracts can be classified as offshore futures under CFTC Regulation 30.1. Under certain conditions, the CFTC will not recommend enforcement action against CFM for transferring customer-held digital assets and stablecoins to its offshore broker affiliates for margin purposes, with the affiliate having re-usage rights over those assets.

Previously, the U.S. market lacked truly perpetual contracts (without expiration dates). Coinbase Derivatives had launched "perpetual-style" futures (with a contract term of up to five years) through self-certification in July 2025, aiming to simulate the economic features of perpetuals but still retaining an expiration date. The current approval and no-action letter provide a dual compliant pathway for "truly perpetual" contracts: Kalshi follows the DCM standard futures route, while Coinbase reaches U.S. clients via foreign futures and crypto collateral.

Mike Selig

CFTC Chairman Mike Selig emphasized in his statement that perpetual contracts are important risk management and price discovery tools in the global crypto asset market. Launching truly perpetual contracts in the U.S. is a significant step toward making the U.S. a global crypto hub. He pointed out that the CFTC has established a feasible regulatory framework for crypto asset perpetual contracts and will maintain market order by limiting excessive leverage, market volatility, and systemic risks.

Selig also candidly acknowledged that the CFTC’s current regulatory stance has not yet formed formal permanent rules, and future policies may adjust as the regulatory environment evolves.

A Trillion-Dollar Market

So why had the CFTC previously not approved truly Bitcoin perpetual contracts?

Perpetual contracts are a "new" product within the traditional commodity futures framework. They have no expiration date or final settlement, which conflicts with the conventional understanding in the Commodity Exchange Act that traditional futures "must have an expiration date and convergence mechanism." Internally, the CFTC has debated whether to classify them as futures or swaps, as different classifications entail vastly different regulatory requirements (including clearing, margin, reporting obligations, etc.). This legal ambiguity has made it difficult for platforms to establish stable compliance pathways.

Additionally, their high leverage, speculative nature, and concerns over market manipulation have kept the CFTC cautious.

BTCPERP, a perpetual contract tracking Bitcoin spot prices, has no fixed expiration date and regularly settles between longs and shorts via funding rates to keep the contract price closely anchored to the spot.

In the global crypto derivatives market, perpetual contracts have long dominated. According to CoinGecko’s 2025 annual report, the total trading volume of crypto derivatives on centralized exchanges reached approximately $85.7 trillion, with perpetual contracts accounting for about 78%. In 2025, decentralized exchanges’ perpetual contracts traded around $6.7 trillion (a +346% year-over-year increase).

Ironically, while Washington’s traditional regulators debate compliance, offshore decentralized perpetual platforms like Hyperliquid have already extended their reach via on-chain synthetic assets to the S&P 500, crude oil, and gold. As of the end of May 2026, Hyperliquid’s perpetual trading volume had reached $586.12 billion, and according to Allium’s on-chain data, Hyperliquid’s total derivatives open interest approached a historic high of nearly $60 billion, with more individuals and institutions choosing to trade there.

Hyperliquid’s Latest Open Interest

This unprecedented approval by the CFTC is not only a compromise for the crypto market but also an innovative push against offshore "assets all can be perpetual," forcing the compliant world into a "domestic defense" battle.

Compared to regulated Bitcoin futures like CME, which provide stable hedging tools for institutions but differ in leverage and trading features from perpetual products favored by retail and professional traders.

This approval opens a new battlefield for Kalshi in the prediction market, blurring the boundaries between prediction markets and traditional crypto derivatives. Kalshi can leverage compliant event settlement logic to tap into what was once the domain of centralized exchanges’ perpetual funding pools. For Coinbase, the trading volume and revenue from its perpetual contracts may be reflected more concretely in upcoming earnings reports.

U.S. traders previously relied on offshore platforms, facing custody risks, regulatory uncertainties, and barriers to institutional access. This regulatory policy release, supporting crypto collateral, will attract hedge funds, family offices, and other traditional institutions. Traders can hold leveraged positions long-term to hedge spot exposure without frequent operations, while some offshore flows may return to compliant U.S. channels.

Meanwhile, the approvals for Kalshi and Coinbase will stimulate faster deployment of other products like ETH perpetuals, forming a more complete crypto derivatives ecosystem. In the long term, this policy could enhance the U.S.’s competitiveness in the global crypto derivatives space, attracting more capital, talent, and infrastructure, and fostering deeper integration of crypto assets with traditional finance.

Currently, it may be the most friendly era for crypto regulation.