U.S. Regulators Push for Lighter Touch on Crypto Perpetual Futures

The United States’ two principal regulators are urging a lighter touch to coax the crypto perpetual futures market back onto domestic soil.

Bipartisan Call from Former Regulators

Former SEC and CFTC officials warned that ambiguous jurisdictional lines could drive high‑liquidity trading offshore, and they jointly appealed for clearer, risk‑based rules.

Offshore Perpetuals: Scale and Stakes

Projected offshore perpetual trading is set to reach $90 trillion by 2025, up from roughly $28 trillion just two years earlier.

■$90 trillion: Expected offshore perpetual volume in 2025.

■$28 trillion: Offshore volume in 2023.

■$2.5 trillion: Estimated total market size of the crypto industry.

■3‑5 years: Window before regulatory clarity could shift liquidity back to the U.S.

SEC’s Custody Rule Overhaul: What’s Changing?

The SEC has forwarded a draft rewrite of its crypto custody rules to OIRA, aiming to clarify how investment advisers can act as qualified custodians for digital assets.

■Adapting Qualified Custodian standards to include crypto.

■Replacing the previous sweeping Safeguarding proposal with a more flexible framework.

■Public comment deadline: October 20.

Strategic Takeaways for Investors

A lighter regulatory approach could accelerate the return of liquidity to U.S. exchanges; otherwise, the market risks a prolonged offshore exodus.

■Growth of domestic platforms offering perpetual futures.

■Shift from high compliance costs to risk‑proportionate regulation.

■More transparent operating environment for market participants.

Market participants will continue to gravitate toward offshore venues if regulatory uncertainty persists. However, a risk‑weighted, lighter‑touch regime can pull liquidity back to the United States, restoring long‑term investor confidence and opening new opportunities for both institutional and retail players.