The CFTC and the SEC have circulated a draft jurisdictional framework on crypto perpetual-futures contracts to industry stakeholders, according to multiple sources familiar with the document. The framework, if formalized, would give the CFTC primary regulatory authority over the substantial majority of crypto perpetual products while reserving SEC authority over derivatives that reference tokens treated as securities under existing case law.
The draft has not been publicly released and is not yet final. But its existence represents the most concrete progress on a jurisdictional question that has constrained crypto derivatives policy in the U.S. for the better part of a decade.
The Substance
The framework, as described to The Settlement, would establish four main principles.
Physically-settled perpetual futures referencing commodity-classified crypto assets (Bitcoin, Ether under recent guidance, and the other assets the agencies have collectively recognized as commodities) would fall under primary CFTC jurisdiction. This covers what is by far the largest segment of the crypto-perpetuals market.
Cash-settled perpetual derivatives that reference baskets including security-classified tokens would require coordinated approval from both agencies, with the SEC retaining authority over the security-token components.
On-shore retail-facing perpetual products would be subject to additional CFTC consumer-protection rules including margin requirements, position-size limits, and disclosure standards that exceed the institutional-customer standards currently applied.
Decentralized perpetual protocols would be subject to a yet-to-be-defined framework that the draft acknowledges as needing further development. This is the area of least clarity in the document and reflects the genuine difficulty of applying the agencies' historical regulatory categories to permissionless on-chain protocols.
The History That Produced This
The CFTC-SEC turf war on crypto derivatives has been unresolved since at least 2019, when the first substantive crypto-perpetual products began offering U.S. retail access. The two agencies have made periodic public statements about their respective jurisdictions, but the statements have been incomplete, sometimes contradictory, and generally not actionable for industry participants trying to design compliant products.
The cost of the unresolved turf has been visible. Crypto perpetuals — by far the most-traded crypto product class globally — have been substantially absent from regulated U.S. venues. The U.S.-domiciled crypto exchanges have offered futures (CME-cleared Bitcoin and Ether futures, primarily), but the perpetual-style products that dominate global crypto trading have remained off-shore.
The draft framework, if formalized, would unblock the most important of these absences: U.S.-regulated perpetual products on the major spot-classified crypto assets. Reporting suggests that several U.S.-domiciled exchanges (Coinbase, Kraken, the Robinhood-operated Bitstamp) have advanced product designs that have been waiting on exactly this jurisdictional clarification.
Industry Response
Industry response to the framework has been broadly positive, though with notable caveats.
The major U.S.-domiciled crypto exchanges have welcomed the clarity, with Coinbase and Kraken issuing statements supportive of the framework's general direction. Both exchanges have indicated that they are prepared to launch CFTC-regulated perpetual products on a relatively short timeline if the framework is formalized.
The DeFi sector's response has been more cautious. The framework's treatment of decentralized perpetual protocols is the least developed component, and there is reasonable concern among DeFi-perpetual operators (Hyperliquid, dYdX, GMX, others) that the eventual specifics could be materially restrictive in ways the broader framework's general direction does not yet suggest.
The traditional derivatives industry — the CME and the major TradFi market makers that dominate U.S. derivatives flow — has been notably quiet, which is itself informative. The CME's Bitcoin and Ether futures business has captured meaningful institutional volume in the absence of perpetual alternatives, and a CFTC-approved perpetual product offered by a competing venue would create direct competitive pressure.
What Could Derail the Framework
Three factors could prevent the draft from advancing to formalization.
Inter-agency disagreement. The two agencies have produced a draft, but the process from draft to joint formal release has historically been slow and has frequently been derailed by changes in agency leadership or policy priorities. The current draft has reportedly been in development for roughly 18 months; the path from current state to formalization could easily take another 12.
Congressional intervention. Congress has been working on broader crypto-market-structure legislation that would, if enacted, supersede agency-level jurisdictional questions. If the legislation advances, the agencies may pause their own framework efforts to avoid pre-empting legislative direction. If the legislation stalls, the agency framework becomes more important.
Industry pushback on specific provisions. The framework's provisions on retail-facing perpetuals — margin requirements, position-size limits — are likely to face industry pushback, particularly from venues that view permissive retail access as a competitive necessity. Whether the pushback succeeds in modifying the framework or whether it instead delays formalization without producing changes is the relevant question.
What's Worth Watching
The next visible signal is whether the draft framework moves from circulation to formal joint release. A joint release would commit both agencies publicly and would establish the framework as the operative jurisdictional position. Continued circulation without formal release suggests the agencies are still negotiating the specifics or facing leadership disagreements that prevent finalization.
The second signal is whether U.S.-domiciled exchanges actually launch products under the framework's anticipated parameters. A successful Coinbase or Kraken perpetual launch — even of a single product, with conservative parameters — would establish the framework's operational reality in a way that draft documents cannot.
The third signal is the DeFi-perpetual provisions. The draft's acknowledgment that this area needs further development is honest, but the eventual specifics will determine whether U.S.-accessible DeFi perpetuals operate within the framework or remain in a regulatory gray zone. The approach the agencies take here will shape DeFi-perpetuals development globally for years.
For now, the existence of a circulating draft framework is the most concrete progress on this question in years. Whether it advances to formalization or whether it joins the long list of crypto-policy initiatives that produced drafts and not finalization will determine whether U.S. perpetual markets open up over the next 18 months or whether the off-shore concentration of crypto-perpetual flow continues.
