A group of former SEC and CFTC officials is urging regulators to ease up on crypto perpetuals, warning that heavy-handed rules could keep a $90 trillion market offshore. The push comes as the Clarity Act sits in recess limbo and agencies move ahead on derivatives and custody rules.
A lighter touch for perps
The former officials argue that the current regulatory trajectory is too restrictive. They want rules that let perpetuals trade onshore without the kind of burdens that would make it impractical. The goal is to bring activity into the open, not drive it further into the shadows. They're not asking for a free pass, just a more measured approach.
Perpetuals are a big deal. They're the most-traded crypto derivative, and the volume is enormous. But the regulatory environment is still a patchwork, and that's exactly what the former officials are trying to change.
The Clarity Act's recess problem
The Clarity Act, which would give digital assets a clearer legal status, is stuck. Congress is in recess, and the bill hasn't moved. That leaves a vacuum. Without clarity, firms don't know which rules apply, and that uncertainty is itself a barrier. The former officials see the act as a key piece of the puzzle, but it's not going anywhere right now.
The timing isn't great. A bill that's supposed to bring clarity is sitting idle while the market keeps growing. The longer it stays in limbo, the more pressure builds on agencies to act on their own.
Agencies aren't waiting
Meanwhile, the SEC and CFTC are pressing ahead on their own. They're working on rules for crypto derivatives and custody. That's a sign they're not waiting for Congress. But it also means the rules could be piecemeal, and possibly stricter than what the former officials want. The agencies are moving, but the direction is still unclear.
There's a real risk that the two agencies end up with overlapping or conflicting rules. That's the kind of mess that pushes firms to stay offshore, where the rules are simpler and the costs are lower.
The $90 trillion offshore risk
The stakes are high. Perpetuals trading is a massive market, estimated at $90 trillion. If onshore rules are too heavy, that volume stays offshore, where oversight is thinner. The former officials say that's the wrong outcome. They're pushing for a regulatory environment that makes it easier, not harder, to trade perps onshore.
The question now is whether the agencies will listen, and whether the Clarity Act gets moving when Congress returns. The market isn't going to wait.
