Gillibrand Son's Perps Exchange Seeks Dual Oversight Amid Regulatory Push

Sen. Kirstin Gillibrand's son, Theodore Gillibrand, has raised $30 million in funding for his startup, American Perpetuals Exchange Corporation (APEC). The round was led by venture firm Lux Capital at an estimated $300 million valuation.

APEC plans to file for a Designated Contract Market license with a special exemption to list perps on single-name equities under joint CFTC and SEC oversight. This move comes as the Commodity Futures Trading Commission (CFTC) and Securities Exchange Commission (SEC) collaborate on a 'harmonization' strategy to unify their approach to novel markets and asset classes like crypto and perps.

Recently, the CFTC approved Kalshi's request to list the first official Bitcoin perp in the U.S., and permitted Coinbase to list long-dated 'perp-style' futures. However, CME Group has sued the CFTC over these approvals, arguing that perps are legally swaps under the Dodd-Frank Act.

APEC intends to apply for a Derivatives Clearing Organization (DCO) license, which would allow it to clear its transactions in-house. The company also plans to allocate significant capital towards regulatory compliance and infrastructure, building out a compliance team and technical systems required for exchange operations.