Coinbase Petitions SEC and CFTC for Perpetual Derivatives Rules

Coinbase submitted a formal response to the SEC and CFTC on August 25, calling for a unified regulatory framework to allow US-based exchanges to offer perpetual derivatives [1]. The exchange argues that current jurisdictional overlap between the two agencies keeps these products—which allow traders to hold leveraged positions indefinitely—stuck in offshore markets, hindering US competitiveness [1].

Untangling the jurisdictional fog

Perpetual derivatives, which function as futures contracts without an expiration date, have historically dominated offshore crypto trading volume [1]. While the CFTC has previously recognized that perpetuals involving digital commodities qualify as commodity futures, the current regulatory environment remains fragmented [1]. When a contract references a digital asset that could be classified as both a commodity and a security, the line between the CFTC’s oversight of swaps and the SEC’s authority over security-based swaps becomes blurred [1].

Coinbase’s proposal outlines three specific paths to resolve this conflict: establishing alternative compliance frameworks to avoid redundant infrastructure, classifying equity perpetual derivatives as security futures, and permitting regulated exchanges to list securities-related event contracts [1]. The exchange emphasizes that building parallel compliance systems for both agencies is costly, creating a barrier to entry that disproportionately affects smaller firms [1]. This filing aligns with a broader push by the Commissions, which entered a Memorandum of Understanding on March 11, 2026, to improve coordination and harmonization across their respective jurisdictions [2].

The shift toward onshore parity

The regulatory pressure comes as the CFTC actively works to bring perpetual-style contracts and prediction markets under a domestic framework [1]. Prediction markets have seen rapid growth, with volumes exceeding $25 billion in 2025 [2]. Despite this growth, the legal status of these products remains a point of contention, with active litigation, such as the Kalshi-related cases and Crypto.com v. Nevada, highlighting the ongoing uncertainty in the sector [2].

Coinbase, which operates entities registered with both the CFTC and the SEC, argues that the current "jurisdictional fog" prevents US exchanges from competing with global platforms that have offered these instruments for years [1]. The Commissions’ joint Request for Comment, published in the Federal Register on June 24, 2026, seeks to address these exact challenges by exploring how to define "swaps" and "security-based swaps" in an increasingly convergent financial ecosystem [2].

What to watch

• Commission Response: Monitor whether the SEC and CFTC adopt the "alternative compliance" framework, which would allow firms to satisfy requirements of one agency by meeting substantially similar standards of the other [2].
• Legal Precedents: Watch for further developments in the Ninth Circuit regarding Crypto.com v. Nevada and other pending litigation that may force a judicial clarification on the status of event contracts [2].
• Regulatory Harmonization: Track the progress of the Joint Harmonization Initiative established by the Commissions to see if it results in new, objective criteria for distinguishing between swaps and security-based swaps [2].

The core of the debate remains whether the US can create a unified regulatory path for innovative financial products that do not fit neatly into the legacy definitions established by the Dodd-Frank Act [2]. Until the SEC and CFTC resolve their jurisdictional overlap, the availability of perpetual derivatives for US traders remains at a standstill [1].