Terry Duffy, chairman and CEO of CME Group, issued a broad rejection of the first U.S.-approved perpetual futures contracts on Thursday, warning that the products could expose retail traders to elevated leverage. Speaking at the Piper Sandler Global Exchange & Fintech Conference, Duffy stated he has grave concerns with how these contracts are structured, citing offshore markets where perpetual futures trade with leverage ranging from 20x to as high as 250x—compared with CME's roughly 5x framework on crypto products. The criticism came days after the Commodity Futures Trading Commission approved the first perpetual futures contracts tied to cryptocurrency prices, with Kalshi listing the contracts on May 29.
Duffy Warns of Elevated Leverage in Perpetual Futures
Duffy said at the conference that he does not like to see people who do not understand products potentially get blown out of a contract they should not be in the first place. He compared current market behavior to conditions ahead of the 2008 financial crisis, stating, "I really believe it's 2007. The housing market has been supplanted by the speculation market, including predictions and everything else, and this could be a disaster waiting to happen."
Perpetual futures allow traders to take leveraged positions on an asset's price without an expiration date, unlike traditional futures, which settle on a defined maturity.
CFTC Approves First U.S. Perpetual Futures Contracts
The Commodity Futures Trading Commission approved the first perpetual futures contracts tied to cryptocurrency prices, with Kalshi listing the contracts on May 29. Offshore venues dominate global perpetual trading activity. Hyperliquid accounted for 6.6% of monthly perpetual volume in May, according to data from The Block. HIP-3, its builder-deployed perpetual framework, generated more than $62 billion in volume that month.
CME Group and Intercontinental Exchange previously urged the CFTC to examine offshore perpetual futures markets as the structure gained traction outside traditional exchanges. Several U.S. exchanges have also explored launching similar products.
Duffy Criticizes CFTC Approval Timeline
Duffy criticized the CFTC's approval process, saying he disagreed with the agency's decision to permit the contracts. He said the review concluded in less time than a standard self-certification window, which allows listing after 24 hours, absent objections. "I totally disagree with the government, and I'll deal with it as we need to move forward," Duffy said at the conference.
In a separate interview, Duffy said he contacted CFTC Chair Michael Selig on the day of approval to express concern, Bloomberg reported.
FAQ
What did CME CEO Terry Duffy say about perpetual futures contracts?
Terry Duffy stated at the Piper Sandler Global Exchange & Fintech Conference that he has grave concerns with how the first U.S.-approved perpetual futures contracts are structured. He warned that offshore markets offer leverage ranging from 20x to as high as 250x, compared with CME's roughly 5x framework on crypto products, and said the situation could be a disaster waiting to happen.
When did the CFTC approve the first U.S. perpetual futures contracts?
The Commodity Futures Trading Commission approved the first perpetual futures contracts tied to cryptocurrency prices, and Kalshi listed the contracts on May 29. Duffy's remarks came days after this approval.
How does offshore perpetual futures volume compare to U.S. markets?
Offshore venues dominate global perpetual trading activity. Hyperliquid accounted for 6.6% of monthly perpetual volume in May, with its HIP-3 framework generating more than $62 billion in volume that month, according to data from The Block.
