US Crypto Rules Lag: Trading Flees Offshore

The Blockchain Association has formally requested that the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) collaborate on a US regulatory framework for equity perpetual contracts. The industry group argues that the ongoing ambiguity regarding whether these financial instruments fall under securities or commodities law has led to their trading exclusively on offshore platforms.

Equity perpetuals are derivatives that mirror individual stocks but lack a fixed expiration date, allowing traders to maintain positions indefinitely. Periodic funding payments are used to keep contract prices aligned with their underlying shares. The association contends that the SEC and CFTC possess the existing statutory authority to regulate these products without new legislation.

This lack of domestic oversight means the US is missing out on crucial price-discovery data and excludes these activities from US investor protection, asset segregation, anti-money laundering, and market surveillance requirements. The group warns that delaying action could entrench offshore venues, leading to a loss of trading fees, market data, jobs, and technological development for the United States.