On May 29, 2026, the Commodity Futures Trading Commission (CFTC) issued a policy statement explaining how it will treat perpetual contracts, a type of derivative that has become the most heavily traded form of crypto derivative in the world (Policy Statement, p. 1; p. 2). The CFTC’s core message is that, apart from the bitcoin product it approved the same day, a company that wants to list a perpetual contract in the United States should get the agency’s review and approval first, under Commission Regulation 40.3 (17 CFR 40.3), rather than certifying the product on its own (Policy Statement, p. 1). The statement was issued in Washington, D.C. by Christopher Kirkpatrick, Secretary of the Commission (Policy Statement, pp. 1, 7).
This matters because perpetual contracts have, until now, traded almost entirely outside the United States. The statement explains that uncertainty about how these products fit within U.S. law pushed their market overseas, and the CFTC’s aim is to give them a clear, regulated path to develop at home instead (Policy Statement, p. 2; p. 6). The agency released the statement together with an order approving the first U.S. perpetual futures contract, one tied to the spot price of bitcoin, and used the statement to explain how it will handle perpetual contracts on other assets (Policy Statement, p. 1; p. 3, n.4).
This post explains what the CFTC said: why it acted now, how perpetual contracts differ from ordinary futures, the manipulation concerns their design creates, and why the agency wants to review these products before they launch. One point is worth making at the start: the policy statement is guidance, not a binding rule, so it does not change the law or create new legal obligations (Policy Statement, pp. 3-4).
Why did the CFTC issue a perpetual contracts policy statement?
The CFTC acted because the market for these products had developed almost entirely offshore. The statement explains that perpetual contracts “have become a dominant form of crypto derivative trading in global markets,” but that, “given the regulatory uncertainty concerning the appropriate classification of these types of contracts,” the market “has largely developed outside of the United States, with the majority of trading occurring on offshore trading venues” (Policy Statement, p. 2).
The CFTC had spent about a year preparing for this step. On April 21, 2025, Commission staff asked the public for input on trading and clearing perpetual-style derivatives, CFTC Release No. 9069-25, along with a companion request on round-the-clock (24/7) trading, CFTC Release No. 9068-25 (Policy Statement, p. 2, nn.1-2). The statement also points to the President’s Working Group on Digital Asset Markets report of July 30, 2025, which urged the CFTC and the U.S. Securities and Exchange Commission to use their existing authority to give faster, clearer guidance for new derivatives products, including perpetual contracts (Policy Statement, p. 3, n.3).
The bitcoin order issued the same day set the boundaries of the statement. That order let a regulated exchange (a designated contract market) list a perpetual contract tied to the spot price of bitcoin, and the policy statement covers everything the order does not, namely perpetual contracts on other kinds of assets (Policy Statement, p. 1; p. 3, n.4).
How do perpetual contracts differ from traditional futures contracts?
The main difference is simple: a perpetual contract never expires. The statement defines perpetual contracts as “derivative contracts that have no fixed expiration date, and which rely on a periodic funding rate mechanism, rather than a fixed expiration date, to maintain relative price parity with the underlying asset’s spot price” (Policy Statement, p. 2).
An ordinary futures contract stays close to the market price because it expires on a set date. A perpetual contract has no expiration, so it uses a recurring payment between buyers and sellers to keep its price in line. As the statement explains, “When a perpetual contract trades above the spot price, the traders with long positions make payments while the traders with short positions receive payments; and vice versa” (Policy Statement, p. 4). Those payments give traders a reason to trade against any gap between the contract price and the real market price, which pulls the two back together (Policy Statement, p. 4).
In short, the funding rate does the job that an expiration date does for a normal futures contract. The statement calls it a tool that “functions as a replacement to the traditional expiration-based convergence mechanism upon which a futures contract typically relies” (Policy Statement, p. 5).
What concerns do perpetual contracts raise under DCM Core Principle 3?
Because a perpetual contract never expires, it is harder to guard against manipulation, and that is the CFTC’s main concern. Under DCM Core Principle 3 (7 U.S.C. 7(d)(3)), a regulated exchange may list a contract only if it is not easily manipulated. For an ordinary futures contract, regulators mainly need the settlement price to be reliable at one moment, when the contract expires; a perpetual contract has no such moment, so its reference price must stay reliable the entire time it trades (Policy Statement, p. 5).
The statement makes this point directly, connecting the manipulation concern to its decision to require advance review:
Perpetual contracts raise novel and complex questions relating to market structure, customer protection, resilience during periods of market stress, and consistency with the Core Principles applicable to registrants under the CEA. For example, a perpetual contract’s design and characteristics raise important considerations with respect to DCM Core Principle 3, which requires that a DCM list only those contracts that are not readily susceptible to manipulation.7 For a traditional, cash-settled futures contract, the susceptibility-to-manipulation analysis directed at the cash settlement reference price is an analysis of one moment in time: the settlement reference price must be reliable at expiry. For a perpetual contract, however, the reference must be reliable at every funding interval, without interruption, for as long as the contract remains active.
It is therefore the Commission’s view that perpetual contracts that reference asset classes that are not contemplated in the Order should be submitted for Commission review and approval pursuant to the voluntary product approval process under Commission Regulation 40.3.
Policy Statement Concerning the Listing of Perpetual Contracts (p. 5)
Why does the CFTC favor Regulation 40.3 review over 40.2 self-certification for perpetual contracts?
The CFTC wants to review these products itself before they go live. Normally, under Regulation 40.2 (17 CFR 40.2), an exchange can certify on its own that a new product follows the law and then list it without waiting for approval. The CFTC decided that perpetual contracts are new and complicated enough that the public is better protected if the agency reviews them first, through the approval process in Regulation 40.3 (Policy Statement, pp. 5-6).
The agency also pointed to the benefits of reviewing products in advance. Advance review, the statement says, “promotes transparency, facilitates engagement between Commission staff and registrants during product development, and provides greater regulatory clarity” for companies trying to bring new products to market responsibly (Policy Statement, p. 6).
The CFTC also signaled that it will treat different assets differently. A footnote calls perpetual contracts on agricultural products “likely particularly ill-suited” to this design, while perpetual contracts on equity securities or narrow-based security indexes “would benefit from review by the Commission and the U.S. Securities and Exchange Commission” (Policy Statement, p. 3, n.5). The agency added that it may revisit perpetual contracts later through separate guidance or a formal rule, but it made no commitment either way for now (Policy Statement, pp. 6-7).
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Frequently Asked Questions
What does the CFTC’s perpetual contracts policy statement say?
It says that, except for the bitcoin product the CFTC approved the same day, a company that wants to list a perpetual contract in the United States should get the agency’s approval first, under Regulation 40.3, instead of certifying the product itself (Policy Statement, p. 1). The statement is guidance, not a new rule, so it does not change the law or add new legal obligations (Policy Statement, pp. 3-4).
What is a perpetual contract and how does its funding rate work?
A perpetual contract is a derivative that has no expiration date and uses a recurring payment, called the funding rate, to stay close to the price of the asset it tracks (Policy Statement, p. 2). When the contract trades above the asset’s market price, buyers pay sellers; when it trades below, sellers pay buyers, which gives traders a reason to push the price back in line (Policy Statement, p. 4). This payment does the job that an expiration date does for an ordinary futures contract (Policy Statement, p. 5).
Why does the CFTC require Regulation 40.3 review instead of Regulation 40.2 self-certification for perpetual contracts?
Because the CFTC views perpetual contracts as new and complex enough that reviewing them in advance protects the public better than letting companies certify them on their own (Policy Statement, pp. 5-6). Regulation 40.2 lets a company self-certify that a product follows the law, but the lack of an expiration date and open questions about market structure and customer protection led the CFTC to prefer the approval process in Regulation 40.3 (Policy Statement, p. 5; p. 6). The agency said advance review also improves transparency and gives companies clearer expectations (Policy Statement, p. 6).
Which perpetual contracts are covered by the CFTC’s bitcoin Order, and which need separate review?
The order covers one product: a perpetual contract tied to the spot price of bitcoin, listed by a regulated exchange as a futures contract (Policy Statement, p. 1). Perpetual contracts on other assets, such as agricultural products, precious metals, equity securities, and narrow-based security indexes, are not covered and should be submitted to the CFTC for separate review under Regulation 40.3 (Policy Statement, p. 3, n.5). The statement suggests agricultural products are a poor fit for this design, and that equity-based products may also need review by the SEC (Policy Statement, p. 3, n.5).
Is the CFTC’s perpetual contracts policy statement legally binding?
No. It is guidance that explains the CFTC’s views; it does not impose obligations, create legal rights, or change the law or the agency’s regulations, and it was not adopted through formal notice-and-comment rulemaking (Policy Statement, pp. 3-4). The CFTC also left open whether it might address perpetual contracts later through separate guidance or a formal rule (Policy Statement, pp. 6-7).