ESMA Reiterates Regulation of Crypto Derivatives Under Traditional Framework

The European Securities and Markets Authority (ESMA) has issued a statement reaffirming the regulation of crypto derivatives under traditional financial frameworks. According to ESMA, crypto derivatives that provide leveraged long or short exposure, are cash-settled, or mirror the risk profile of Contracts for Difference (CFDs), will be subject to the same rules as CFDs.

This means that product labels such as 'perpetual future' or 'perpetual contract' do not exempt a product from EU financial regulation if its structure and risk profile align with CFDs. ESMA emphasizes that regulatory treatment depends on a product's economic characteristics, not its name.