May 26, 2025 — As the U.S. Commodity Futures Trading Commission (CFTC) intensifies its regulatory review of crypto derivatives—particularly perpetual contracts—the crypto industry is actively pursuing compliance pathways while leveraging decentralized frameworks to preserve space for innovation.
The CFTC has ramped up enforcement actions against unregistered exchanges offering leveraged contract products, prompting major platforms such as Binance, Coinbase, and Kraken to enhance their compliance efforts. For example, Binance has significantly restructured its global operations by restricting U.S. IP access to perpetual contracts, strengthening user identity verification, and offering related services via overseas affiliates.
Coinbase, on the other hand, is exploring compliance avenues for perpetual trading by establishing offshore platforms, with new operations in jurisdictions like Bermuda reflecting traditional exchanges’ strategies to expand beyond existing regulatory frameworks. Kraken has opted for a more conservative approach, limiting derivatives trading to high-net-worth accredited investors and maintaining ongoing dialogue with regulators to explore product structures that meet regulatory requirements.
Industry Bodies Advocate for “Crypto-Native Regulatory Frameworks”
In response to tightening oversight, several industry organizations are pushing for regulatory systems tailored to the characteristics of blockchain. Entities such as the Blockchain Association and Coin Center emphasize that blockchain-based perpetual contracts are fundamentally different from traditional financial instruments, and existing commodity futures regulations are ill-suited for these innovations.
Investment firms like Paradigm are advocating for the formation of dedicated committees to study perpetual derivatives in the DeFi space and integrate them into the evolving financial system, rather than impose restrictive measures. These advocates argue that regulation should facilitate smart contract auditability and protocol-level innovation, rather than limit activity to licensed centralized platforms.
Decentralized Protocols Embrace “Governance Reinforcement” and “Self-Regulation”
Although decentralized derivatives protocols—such as dYdX, GMX, and Kwenta—are not directly under CFTC jurisdiction due to their technical structure, they have adopted more cautious compliance strategies. Common measures now include geoblocking on front-end access, legal disclaimers for contracts, and full DAO (Decentralized Autonomous Organization) governance.
dYdX, in its v4 release, has fully decentralized all critical control elements, transferring all parameter changes and product decisions to on-chain community governance, reinforcing the ethos of “code as law.” However, legal experts warn that if development teams or core maintainers are based in the U.S., they could still face regulatory pressure.
Beyond decentralization, some exchanges are seeking formal registration as CFTC-recognized market entities—such as Swap Execution Facilities (SEFs) or Designated Contract Markets (DCMs). Companies like Bitstamp and LedgerX have announced they are initiating application processes to obtain legal status for offering crypto perpetual contracts.
Emerging projects are also experimenting with hybrid trading models, combining on-chain execution with traditional clearing mechanisms. These setups involve registered clearing organizations for custody and settlement, aiming to reduce systemic risk.
Perpetual Contracts Dominate Crypto Derivatives, Prompting Heightened Regulatory Focus
According to industry data, perpetual contracts now account for over 90% of global crypto derivatives trading volume, making them a cornerstone of market development. Numerous crypto firms have jointly submitted feedback to the CFTC, highlighting that this contract type offers greater liquidity, transparency, and user-friendliness compared to traditional futures, making it a vital tool for both retail and institutional participants.
Hyperliquid Labs pointed out that decentralized perpetuals offer unprecedented auditability and transparency, with all transactions recorded on-chain, significantly enhancing trust. The firm also emphasized that asset self-custody mechanisms reduce platform risk exposure and improve trading security.
OKX noted the structural advantages of perpetual contracts in terms of trade depth and arbitrage efficiency, making them especially suitable for professional hedging and cross-platform strategies.
The CFTC is currently evaluating whether to establish a dedicated regulatory framework for perpetual contracts. Several officials have recently expressed a desire to “expedite” the process of enabling legally compliant perpetual contract trading in the U.S. For the industry, this represents both a challenge and an opportunity to reshape market structures.
Whether through licensed centralized exchanges or fully decentralized DeFi protocols, self-regulation and collaboration are emerging as essential themes. The path toward regulatory compliance for crypto derivatives is accelerating under the dual forces of global regulatory consensus and technological advancement.