CFTC Defends Approval of Perpetual Futures Contracts in US

CFTC Chair Michael Selig defended his agency's decision to approve 'perps' in the US, citing the need for onshore products that are developed internationally. The CFTC approved prediction market platform Kalshi to offer bitcoin perpetual futures contracts with no expiration date, allowing traders to speculate on a price without owning the underlying asset.

The approval marked the first time the asset class was allowed in the US and has since expanded its perps offerings to other cryptocurrencies. Demand for perps has been high, with Kalshi's contracts doing over $3 billion in notional volume in just over a week in beta testing.

Selig dismissed concerns that the leverage carried with the contracts is large and risky, saying 'The notion that we should be paternalistic and allow for one type of product, because it's easier to understand, I think that's frankly a misunderstanding itself.'