CFTC Clears Coinbase for Global Crypto Perpetual Futures Trading

The CFTC gave Coinbase a green light to offer crypto perpetual futures on Friday, paving the way for the U.S. exchange to start connecting its customers to the lucrative and highly risky offshore market. Coinbase is now effectively permitted to offer its customers access to the global crypto perpetual futures market through Deribit, an offshore crypto options exchange Coinbase acquired for $2.9 billion last year.

Perpetual futures are derivatives contracts with no expiration date, which allow traders to place highly leveraged bets on the future price of crypto assets with borrowed capital. Think of them as bets on crypto prices that never close—unless you get liquidated first.

A source familiar with the matter told Decrypt that Coinbase has not yet determined which crypto assets it plans to enable for perpetual futures trading. The CFTC has cleared the way for the company to offer all "digital commodity" perpetual futures contracts traded on Deribit—a category that includes markets for tokens including Bitcoin, Ethereum, Solana, Dogecoin, and the TRUMP meme coin, among others. Coinbase will decide which of those assets are "fit for purpose" and "the right kind of assets" to offer U.S. customers in the form of perpetual futures, the source said.

Correct wagers on perpetual futures can earn a trader multiple times their initial investment. Wrong bets, however, can quickly be liquidated or forcibly closed by exchanges, sometimes causing devastating cascade effects. Last fall, rapid fluctuations in crypto prices on a single afternoon wiped out $19 billion worth of crypto positions within minutes, principally because of the extent of leverage.

The CFTC has signaled for over a year that it planned to bring crypto perpetual futures, also known as "perps", into the United States. While risky, the crypto perps market is undeniably profitable. In the last month alone, over $588 billion worth of crypto perps trading volume has been recorded, according to DeFi Llama. In contrast, the entire decentralized finance (DeFi) ecosystem has seen just $160 billion worth of trading volume in the same period.

On Thursday, Coinbase sent the CFTC a letter requesting the regulator issue a no-action letter—a guarantee that it would not pursue legal action should Coinbase begin offering customers access to offshore crypto perps. Less than 24 hours later, the CFTC replied with an elaborate, 16-page document outlining a new policy permitting Coinbase's requested activities.

In addition to granting Coinbase the ability to offer offshore crypto perps on its domestic exchange, the CFTC on Friday also gave prediction market Kalshi the green light to create its own Bitcoin perpetual futures in the United States—the first such American-born product of its kind. Although Coinbase is the first U.S. crypto exchange to receive the go-ahead for this specific offering, other exchanges are expected to follow suit, referencing the guidelines laid out in the CFTC's no-action letter.

The CFTC approval for Coinbase follows a similar move in December under former chair Caroline Pham, which greenlit Bitnomial to offer comparable products—albeit with a 25-year limit, technically making them not truly "perpetual" in nature.

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