Regulators Plot to Bring 24/7 Crypto-Inspired Trading to U.S. Markets

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are considering regulatory changes that would allow perpetual contracts to trade on U.S. platforms. This development is part of broader efforts to harmonize oversight of innovative financial products and bring offshore crypto-style instruments back into domestic markets. Perpetual contracts, which are derivatives without a defined expiry date, are commonly traded in offshore crypto markets but have faced jurisdictional and definitional constraints in the U.S. The agencies are exploring concurrent steps to establish a regulatory framework for these products that aligns with investor and customer-protection standards [1].

The joint regulatory initiative reflects a strategic shift in the approach of both agencies toward financial innovation. SEC Chairman Paul Atkins and CFTC Acting Chairman Caroline Pham highlighted the need for a more flexible and agile regulatory environment to prevent the emergence of “no man’s land” in oversight. The agencies emphasized that regulatory uncertainty has discouraged economic activity and driven innovation overseas. By collaborating, the SEC and CFTC aim to reduce such uncertainty and foster a more predictable and supportive environment for market participants [1].

A key element of the proposed regulatory overhaul is the joint SEC-CFTC roundtable scheduled for September 29, 2025. This event will focus on regulatory harmonization and address several priority areas, including perpetual contracts, prediction markets, and portfolio margining. The agencies aim to streamline definitions, reporting standards, and capital frameworks to create a cohesive regulatory landscape. The roundtable is also expected to explore the viability of 24/7 trading in certain markets, which could better align U.S. markets with the global financial landscape [1].

Portfolio margining is another focal point of the regulatory review. Currently, market participants are required to post collateral separately at SEC-registered and CFTC-registered entities, even when their positions hedge each other. The agencies are considering a unified framework that would allow for more efficient netting of exposures. Such a framework could reduce capital lock-up, lower transaction costs, and improve liquidity across U.S. markets [1]. Additionally, the agencies are open to innovation exemptions for decentralized finance (DeFi) protocols, which could enable peer-to-peer trading of crypto assets and derivatives while maintaining investor protections [1].

The move toward regulatory harmonization is being framed as a means to restore the U.S. as a leader in financial innovation. In recent years, novel financial products have been driven overseas due to fragmented oversight and legal ambiguity. By streamlining regulatory approaches, the SEC and CFTC aim to reverse this trend and create a more competitive environment for American financial firms. The agencies also emphasized the importance of protecting core American values such as self-custody of assets while encouraging innovation and expanding market access [1].

The regulatory shift is expected to influence a range of market structures and products, including prediction markets and event contracts. These instruments, which have seen growing demand globally, could gain more clarity in the U.S. through joint regulatory action. The agencies noted that their collaboration could lead to the development of safe harbors or exemptions that allow market participants to engage in new financial activities responsibly. As the U.S. continues to refine its approach to digital assets and decentralized finance, the joint efforts of the SEC and CFTC represent a critical step in shaping the future of financial markets [1].

Source:

[1] Joint Statement from the Chairman of the SEC and Acting Chairman of the CFTC (https://www.sec.gov/newsroom/speeches-statements/joint-statement-atkins-pham-090525)

[2] SEC and CFTC explore ways to bring perpetual contracts to U.S. markets (https://cryptobriefing.com/perpetual-contracts-regulation-sec-cftc/)