The CFTC delivered a major regulatory win for crypto derivatives trading by issuing a no-action letter to Coinbase and granting approval to Kalshi for cryptocurrency perpetual futures contracts. The regulator simultaneously published an advisory addressing risks tied to 24/7 trading cycles in crypto markets.
Coinbase's no-action letter removes legal barriers for the exchange to launch perpetual futures products under CFTC oversight. Rather than seek formal approval, the CFTC signaled it will not take enforcement action against Coinbase's proposed offerings, a common regulatory pathway for established platforms. This positions Coinbase to compete directly with Binance, FTX, and other derivatives powerhouses that already offer perps trading to U.S. retail and institutional clients.
Kalshi received explicit CFTC approval to offer crypto perpetual contracts through its regulated derivatives platform. Kalshi, a prediction markets operator, now joins a shrinking list of CFTC-approved venues for crypto derivatives. The approval reflects the agency's shift toward accommodating structured crypto derivatives products rather than blanket prohibition.
The accompanying advisory flags operational and compliance risks from continuous 24/7 crypto trading. Traditional futures markets close daily, allowing for settlement and margin reconciliation windows. Crypto perps run nonstop, creating liquidity gaps during overnight hours and reducing opportunities for traders to exit positions. The CFTC highlighted potential funding rate manipulation, liquidation cascades, and systemic concentration risk if major platforms face simultaneous technical failures.
The guidance notably avoids banning 24/7 trading but pushes platforms toward stronger risk controls. Requirements include robust margin frameworks, circuit breakers for extreme volatility, and transparent funding rate disclosures. Platforms must demonstrate customer segregation and insurance mechanisms adequate for overnight funding shortfalls.
This represents a pragmatic regulatory approach. The CFTC acknowledges perpetual futures serve legitimate hedging and speculation roles while imposing guardrails against systemic failure. The combination of Coinbase's no-action letter and Kalshi's approval signals the regulator views compliant operators as pref