CFTC Chairman Clarifies Four Major Misconceptions About Perpetual Futures Contracts

**CFTC Chair Mike Selig Debunks Four Myths Surrounding Perpetual Futures Contracts** On June 16, U.S. Commodity Futures Trading Commission (CFTC) Chairman Mike Selig addressed four widespread misconceptions about perpetual futures contracts, clarifying key regulatory and structural details to cut through industry confusion. ### Myth 1: "Fixed Expiry Date Mandate" Critics claim a valid futures contract must have a set expiration or delivery date, arguing perpetual contracts’ open-ended structure violates U.S. congressional intent. Selig pushed back on this, noting the Commodity Exchange Act and CFTC rules lack any formal definition of "futures contract"—nor do they require fixed expirations. Since Congress never codified a legal definition for the term, the matter is settled via case law and CFTC guidance, neither of which mandates a fixed expiry date. ### Myth 2: "250x Leverage Violation" The allegation here is that the CFTC’s approval of the BTCPERP contract let U.S. traders access up to 250x leverage, breaking the agency’s own rules. Selig countered that such extreme leverage is a hallmark of offshore perpetual contract trading—not an inherent feature of the contracts themselves. Perpetual futures regulated by the CFTC follow the exact same leverage limits as all other CFTC-sanctioned products. ### Myth 3: "Lack of Public Input" Critics claim the CFTC failed to give industry stakeholders a meaningful chance to weigh in on perpetual contracts. Selig clarified the agency launched a public comment period in April 2025 focused on "perpetual contracts" and "24/7 trading," drawing more than 100 submissions from diverse stakeholders—including multiple entities overseen by the CFTC. ### Myth 4: "Funding Rate Misconduct Risk" The claim is that the funding rate mechanism saddles traders with an excessive, punitive cost and encourages market manipulation. Selig explained that when factoring in annualized costs of holding traditional expiry-based futures (including opening and rolling positions), those expenses are nearly identical to perpetual contracts’. Far from enabling misconduct, the funding rate acts as a critical check to keep perpetual futures aligned with their underlying spot market prices. Selig’s remarks come as perpetual futures grow in popularity among U.S. and global traders, sparking renewed scrutiny from regulators.