Commodity Futures Trading Commission Chairman Michael Selig weighed in on the perpetual futures debate and defended his agency’s decision to domestically approve the asset in a Monday appearance on CNBC’s “Fast Money.”
Selig said incumbents will always be fearful of the future, but that the commission is paying attention to onshore products that are developed internationally to ensure they can be manufactured safely under strict regulations.
“It’s time to approve regulated futures contracts with no expiration date,” he said. “We will make sure the product is available, but it is well regulated here in the United States.”
In late May, the CFTC approved prediction market platform Kalshi to begin offering Bitcoin perpetual futures, or “Perps,” futures contracts with no expiration date, allowing traders to speculate on a price without owning the underlying asset. The approval, popular abroad, marked the first time the asset class was permitted in the United States. Since then, Kalshi has expanded its Perps offering to other cryptocurrencies.
The demand for perpetrators was high. At an event on Thursday to celebrate its Perps product, Kalshi said its contracts in beta testing had reached more than $3 billion in notional volume in just over a week.
In an appearance on “Fast Money” shortly after the regulatory decision, CME Group CEO Terrence Duffy criticized the decision to allow offenders, raising concerns that the leverage associated with the contracts was large and risky.
But Selig rejected that argument during his appearance Monday.
“The idea that we should be paternalistic and allow a certain type of product because it’s easier to understand is, I think, frankly a misunderstanding because of course the options are very complicated,” he said. “We will ensure that there is proper disclosure. And if there are questions about suitability, then of course brokers will have to make those decisions and ensure that they evaluate the clients who are trading in their markets.”
In an appearance on “Fast Money” last week, Kalshi CEO Tarek Mansour noted that the maximum leverage the company allows its perpetrators – about six times – is less than what CME offers on some of its futures contracts.
Selig also denied that the reason the CFTC sought perpetrator approval was due to political pressure from President Donald Trump’s administration. The president’s son, Donald Trump Jr., is a strategic adviser to Kalshi.
“This is absolutely absurd, this assumption,” he said.
Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority ownership.
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