Big exchanges say Washington just let a risky crypto-style product into the stock market without the right guardrails.
The Trump administration's perpetual futures push cleared a major hurdle on November 3, 2026, when CFTC Chairman Michael Selig said single-stock perpetual futures could finally trade on registered US markets, a move that has since triggered lawsuits from major exchanges and trading firms who say the products are being regulated the wrong way.
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CFTC Opens the Door to Single-Stock Perps
Chairman Selig made the announcement in Washington, saying contracts tied to individual company stocks could begin trading for the first time ever on CFTC-registered exchanges. The agency said these equity perps were deemed approved under Commission Regulation 40.3 as security-futures products, a category created under the Commodity Futures Modernization Act of 2000. Any venue that wants to list them needs to be registered with both the CFTC and the SEC as a national securities exchange capable of handling security-futures products.
This decision matters because it hands prediction-market platforms and other newer trading venues a real path into territory that has always belonged to traditional Wall Street exchanges. It also takes a product that mostly lived in crypto trading and drops it straight into the regulated US stock and futures world. The CFTC framed this as part of a bigger innovation push, pointing back to a May 29, 2026 policy statement that opened the door for case-by-case review of perpetual contracts tied to asset classes not already covered by earlier rules.
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Why Perpetual Futures Work So Differently
Perpetual futures don't expire like normal futures contracts do. Instead of settling on a future date, they use ongoing funding payments between long and short traders to keep the contract price tracking the real stock price. That means they can trade nonstop, even when regular stock markets are closed, and they often come loaded with heavy leverage, as much as 50-to-1 according to Reuters reporting.
That combination is exactly what's making incumbent exchanges nervous. Critics argue regular investors could suddenly get access to a product that trades around the clock, carries massive leverage, and doesn't come with the same protections swaps are supposed to have. There are worries about thin overnight trading, sudden price gaps, and liquidations that are hard to manage when markets are moving fast and few people are watching.
Exchanges Head to Court Over the Rulebook
The real fight here is legal, not just philosophical. Traditional futures point to a future date and usually expire. Swaps involve regular exchanges of cash flows based on some underlying benchmark, and they come with tougher margin, capital, and reporting rules left over from the aftermath of the 2008 financial crisis. Established exchanges argue perps look a lot more like swaps than futures, since they never expire and rely on those constant funding payments.
CME Group has already sued the CFTC over its May decision, arguing the agency wrongly classified perps as futures, which it says creates an unfair playing field and downplays how risky these products really are. A separate lawsuit came from a group that includes Cboe Global Markets and Citadel Securities, this time challenging the November approval specifically tied to equity perps. Neither case has been resolved, and both could reshape whether these products stay under the lighter-touch futures framework or get pushed into the stricter swaps category.
Executives Warn of Risk Across the Market
Reporting from Reuters and other outlets this past week included interviews with executives at incumbent exchanges and major trading firms who all raised similar concerns. Their worries break down into a few clear categories. Leverage tops the list, since retail traders could take on enormous exposure while putting up relatively little money. Counterparty risk is another, because constant funding payments combined with leverage can amplify losses fast if a trading partner can't cover what it owes during a rough patch in the market.
Liquidity is a third worry. Round-the-clock trading sounds appealing, but it can also mean thin markets overnight, sudden price jumps, and tricky situations when positions need to be closed out quickly. Finally, there's the market structure question itself, since new platforms could end up competing directly with established exchanges while working under rules that critics view as softer than what traditional swaps require. The CFTC's response has been consistent: it says these products fit within existing security-futures rules, with both the CFTC and SEC sharing oversight duties.
What Comes Next for Regulators and Traders
The immediate next step is watching how the CME lawsuit and the Cboe-Citadel case play out in court. Those rulings could decide whether equity perps keep trading under the security-futures umbrella the CFTC approved, or whether judges force a shift toward the stricter swaps framework that incumbent exchanges are demanding.
There's also a wider regulatory review underway. Back on March 12, 2026, the CFTC opened a broader look at prediction-market rules, including questions about which event contracts should even be allowed. That review, combined with the pending lawsuits, means the rules around perpetual futures are far from settled. For now, trading can begin on properly registered markets, but the legal fight over how these products should actually be classified is just getting started, and the outcome will shape how leveraged, round-the-clock trading fits into the US financial system going forward.
