Alert
09.08.25
The Chairs of the SEC and CFTC issued a Joint Statement on September 5, 2025 (Joint Statement), announcing a new era of cooperation, including the possibility of using “innovation exemptions” to bring perpetual contracts (perps) and other leveraged cryptocurrency products into U.S. markets. The Joint Statement builds upon—and meaningfully expands beyond—the joint statement of the SEC and CFTC staffs issued a few days earlier by moving from a restatement of current law to a policy-level invitation to explore exemptions, harmonized frameworks and cross-agency approaches to make perp-like products tradable on U.S. markets.
Background
Perpetual contracts—derivatives without an expiry date that are common in offshore crypto markets—have been largely unavailable to U.S. customers because of jurisdictional limits and customer-protection concerns. Certain offshore markets routinely advertise leverage of 50x or even 100x, managed through auto-liquidations, insurance funds and socialized losses rather than the margin and clearinghouse protections familiar to U.S. markets.
By contrast, as discussed in a prior client alert, Coinbase’s exchange listed perps launched earlier this year are capped at “up to 10x” leverage, with actual leverage dynamically determined by clearinghouse margin models, and customer funds protected under CFTC-regulated clearinghouse default waterfalls and CFTC Part 190 segregation rules.
This juxtaposition highlights why U.S. regulators view perps as both attractive and risky: offshore versions thrive on headline leverage, while the U.S. model relies on lower leverage combined with robust systemic protections.
Against this backdrop, the CFTC staff in April of 2025 issued a Request for Comment on the Trading and Clearing of Perpetual Style Derivatives, asking whether these products should be treated as futures or swaps, whether current disclosure and margin requirements are sufficient and what unique risks perps might present for manipulation, market integrity and clearing.
What’s New in the Joint Statement
The Chairs emphasize the potential use of “innovation exemptions” under their existing exemptive authorities to support onshoring of novel products. The idea of using exemptive authority follows the recommendation of the President’s Working Group on Digital Asset Markets Report, which urged regulators to create safe harbors that allow market participants to innovate while longer-term rulemaking is developed.
They also point to a more integrated market structure: the possibility of perennial crypto products offered under harmonized frameworks across SEC- and CFTC-regulated platforms, and even peer-to-peer over DeFi protocols. While last week’s staffs’ statement reaffirmed that retail commodity contracts generally must be traded on a CFTC-registered Designated Contract Market or a CFTC-registered Foreign Board of Trade, subject to a narrow statutory exception for trading on a national securities exchange, the Joint Statement goes further by explicitly inviting consideration of exemptions and cross-regime solutions that could bring perps and related products onshore.
Within these statements lies an intriguing—though aggressive—interpretation: because of the statutory carve-out for certain retail commodity transactions in § 2(c)(2)(D)(ii)(IV) of the Commodity Exchange Act, markets may eventually test whether perps, or at least perp-like economics, could be delivered on an SEC-registered national securities exchange.
Why Market Participants Care
Perps are popular because they eliminate contract rolls and treat the cost of carry as a pay-as-you-go funding rate. The real draw, however, has been ease of access—synthetic exposure without wallets or custody—and headline leverage that has fueled offshore volumes. U.S. regulators are unlikely to permit 100x leverage, but the Joint Statement suggests openness to calibrated models (e.g., lower leverage with robust margining, clearing, and disclosures) that balance innovation with systemic safeguards.
September 29 Roundtable
The SEC and CFTC will host a joint roundtable on September 29, 2025, to discuss regulatory harmonization, with perps on the agenda. Clients should expect continued scrutiny of leverage limits, customer-protection disclosures, surveillance, and clearinghouse resilience, but today’s announcement points to a genuine opening for innovation—and a clear signal that the agencies intend to coordinate rather than leave gaps.
Interaction with Congressional Proposals
It also remains to be seen how the agencies’ approach to exemptive relief will interact with possible legislation. Both the Senate Banking and Agriculture Committees will very soon be circulating draft market structure bills that will reshape jurisdiction over digital asset products. If Congress enacts comprehensive legislation in this space, the agencies’ innovation exemptions may need to be reconciled with statutory changes, and there is a risk of overlap or even conflict. For now, the Joint Statement suggests that the Chairs are not waiting on Congress to act but are moving forward under existing authority. Market participants should monitor both tracks closely.
Next Steps for Market Participants
Market participants considering new product structures, advocacy with regulators, or expansion of crypto derivatives businesses should monitor developments closely and consider engaging in the SEC/CFTC rulemaking process. The September 29, 2025, roundtable will be an early opportunity to help shape the direction of exemptive relief and harmonized frameworks for perpetuals and related products. Pillsbury’s Financial Services and Regulatory teams are available to discuss the implications of the Joint Statement and to assist clients in preparing comments, evaluating product strategies, or engaging with policymakers.