The CFTC and SEC initiate a comprehensive review of rules for crypto derivatives: the end of an era of uncertainty?
U.S. regulators — the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) — have officially launched a public comment process on key definitions for swaps and derivatives. This involves a fundamental overhaul of the regulatory framework that directly impacts crypto derivatives markets.
Conflict with CME as a Catalyst for Change
This move is a direct response to the escalating conflict with the Chicago Mercantile Exchange (CME Group). On June 17, CME CEO Terrence Duffy announced plans to file a lawsuit against the CFTC. The reason is the permission granted to the Kalshi platform to launch perpetual futures. Regulators apparently decided not to wait for court rulings but to take the initiative themselves by clarifying the rules of the game for all participants.
At the center of attention are contracts on prediction markets and perpetual futures. The agencies want to understand how well the current norms embedded in the Dodd-Frank Act align with the modern, rapidly changing market structure. CFTC Chairman Michael Selig emphasized that the initiative's goal is to eliminate legal uncertainty that hinders fair competition. His SEC colleague Paul Atkins added that clarifying the rules for event contracts has been long overdue. The comment collection period will last 60 days.
Monopoly Under Threat
Behind the scenes, the situation appears even more acute. A CFTC representative called the CME lawsuit "unfounded," accusing the exchange of trying to stifle progress through the courts. According to him, dominant players are simply afraid of competition on equal terms. Representatives of the decentralized exchange Hyperliquid also joined this criticism. The Hyperliquid Policy Center stated that CME controls about 92% of the U.S. derivatives market and is desperately trying to maintain its monopoly.
"Americans have been going offshore for years to trade perpetual futures. This is the first truly new product on the regulated U.S. market in a decade. Competition benefits users, and innovation deserves clear rules," the organization noted.
Recall that in May, the CFTC already acknowledged its lawsuit against Gemini was erroneous, stating that the methods of the previous leadership were "inappropriate." This indicates a paradigm shift within the regulator itself.
My analysis: The rule revision is a long-awaited but extremely risky step. On one hand, it could provide a legal "green light" for innovations like perpetual futures, which have already captured offshore markets. On the other hand, attempting to fit decentralized products into the framework of the Dodd-Frank Act, created for traditional finance, could lead to overregulation and stifle the very competition it supposedly aims to protect. The outcome of this battle will determine whether the U.S. remains a hub for crypto innovation or cedes this role to Asia.