Odaily reported that Mike Selig, Chair of the U.S. Commodity Futures Trading Commission, posted on X to respond to several misunderstandings surrounding perpetual futures contracts. His comments also addressed the controversy that followed the CFTC’s recent approval of related contracts. The clarification focused on whether a perpetual contract can still be treated as a futures contract, how leverage should be understood under a regulated framework, whether the industry had a chance to provide feedback, and how funding rates compare with costs in traditional dated futures markets.
No fixed expiry is not a required feature of a futures contract
According to Selig, the Commodity Exchange Act and relevant CFTC rules do not explicitly state that a “futures contract” must have a fixed expiration date or delivery date. He said Congress did not provide a precise definition of the term, so the determination of whether a contract is a futures contract mainly depends on judicial precedent and CFTC interpretation. Under that approach, a fixed expiration date is not a necessary condition. Therefore, the fact that a perpetual contract has no fixed expiry does not, by itself, remove its futures-contract character.
Selig also addressed the claim that the CFTC-approved BTCPERP contract would allow U.S. users to trade with 250x leverage. He distinguished the structure of a perpetual contract from the trading practices previously seen on offshore platforms. In his explanation, high leverage is not an inherent feature of the perpetual contract structure itself; rather, it was a characteristic of certain offshore trading models. Perpetual contracts regulated by the CFTC will be subject to the same leverage limits that apply to other regulated futures products.
Public feedback process and the role of funding rates
On criticism that the CFTC did not give industry participants an opportunity to take part or provide feedback, Selig said the agency had already sought public comment in April 2025 on “perpetual contracts” and “24/7 trading.” The CFTC received more than 100 submissions from industry participants, including several CFTC-registered entities. This point was presented as a response to concerns that the approval process lacked industry input.
Selig also responded to the view that funding-rate mechanisms create high costs and encourage poor market behavior. He said that when the costs of opening and rolling traditional dated futures contracts are taken into account, the annualized holding cost created by funding rates in perpetual contracts is broadly comparable with that of traditional futures. In his explanation, the funding-rate mechanism helps keep the contract price anchored to the spot market and serves as a form of market discipline.