Commissioner Summer Mersinger, who will be leaving the U.S. Commodity Futures Trading Commission (CFTC) at the end of May, has stated that perpetual crypto futures could soon gain regulatory approval.
The outgoing CFTC commissioner has signaled the entry of the long-awaited perpetual crypto futures trading into the United States.
US investors may soon have access to perpetual crypto futures
Commissioner Summer Mersinger, who is set to leave the agency at the end of May, recently stated that perpetual futures, which are crypto derivative products that allow traders to speculate without an expiry date, could soon gain regulatory approval.
The entrance of perpetual crypto futures would spell good news for the U.S. crypto industry, as it has long been restricted by regulatory uncertainty and has limited access to complex trading instruments readily available in offshore markets.
The concept of perpetual crypto futures was initially popularized by offshore platforms such as Binance and Bybit. Perpetuals allow traders to maintain advantageous positions indefinitely because unlike traditional futures contracts, they do not expire.
In an interview this week, Mersinger stated that U.S. exchanges are already laying the groundwork for launching such products.
“We’re going to see these products on U.S. soil very soon,” she said.
The CFTC is going through a transitory period
Congress intends to advance crypto market structure legislation potentially as early as this summer. If the law passes, it would expand the CFTC’s authority to supervise digital assets like Bitcoin and Ethereum. This would in turn formalize the agency’s role as a crypto market regulator alongside the Securities and Exchange Commission (SEC).
The CFTC is currently experiencing a significant loss of staff as many of its commissioners are leaving the agency.
Commissioner Kristin Johnson announced her departure this week, joining Mersinger and Christy Goldsmith Romero, who are both leaving by the end of May. The Acting Chair, Caroline Pham, has also expressed her intention to leave once President Donald Trump’s nominee for the position, Brian Quintenz, receives Senate confirmation.
So far, a hearing has not been scheduled.
The agency now has one confirmed commissioner left and is in danger of falling below quorum. This would threaten the agency’s ability to vote on major initiatives.
“If there are no commissioners, if there’s no quorum, how in the world are they going to do it?” said Peter Malyshev, a former CFTC attorney and current partner at Cadwalader, Wickersham & Taft.
Ronald Filler, the director of the Center on Financial Services Law at New York Law School, stressed the urgent need for the agency to stabilize its leadership. “You need not just an active chair, but a chair to then take direction of the agency to move it forward.” He said.
The CFTC’s credibility crisis
Aside from the CFTC’s personnel crisis, it is also facing what could be a devastating blow to its enforcement credibility. This crisis stems from the collapse of the agency’s high-profile fraud case against Traders Global Group Inc., the operator of the online platform, My Forex Funds.
The case, filed in 2023, accused the CEO of Traders Global Group Inc., Murtuza Kazmi, of running a Ponzi-like scheme and misusing customer funds for luxury purchases. Based on these claims, the CFTC secured an emergency asset freeze.
It was later revealed that the agency had omitted key evidence that could have exonerated the CEO. This included evidence supporting the fact that the “misused” funds were in fact tax payments to Canadian authorities.
The federal judge overseeing the case sanctioned the CFTC, stating that the agency’s misconduct was “willful” and “in bad faith.” The CFTC may now be liable for nearly $3M in legal fees to the defendant’s counsel.
Pham publicly condemned the enforcement staff, calling their conduct “inexcusable.”
With the incident bringing a lot of expected criticism to the agency and with its rapid personnel loss, the CFTC is going through a rough patch. However, a spokesperson stated that the CFTC agency has functioned with minimal staff in the past and insisted that its day-to-day operations remain unaffected.
“Vacancies do not impact the commission’s ability to vote on agency matters,” said Taylor Foy.
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