CFTC Crafts Bespoke Rules for On-Chain Perpetuals

CFTC Chair Mike Selig has signaled that the US Commodity Futures Trading Commission is actively exploring a regulatory framework tailored for on-chain perpetual derivatives platforms. Speaking through a report by Wu Blockchain, Selig emphasized the need to focus on the future of financial markets rather than rigidly applying exchange rules written in 1934.

Unlike traditional exchanges, on-chain perpetual platforms operate through smart contracts and use mechanisms such as Auto-Deleveraging (ADL) to manage risk during volatile market conditions. The chairman acknowledged that these innovations do not fit neatly into existing regulatory categories.

The agency is now developing rules specifically designed for on-chain products, with a focus on investor protection, market integrity, and systemic risk management. This development could bring platforms like Hyperliquid under formal compliance requirements, reducing legal uncertainty for developers and users while providing consumer protections that are currently absent.