CME Group warns U.S. perpetual futures approval raises crypto leverage risks

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CME warns on crypto leverage

Highlights

CME Group CEO Terry Duffy warns CFTC's approval of U.S. perpetual crypto futures introduces higher leverage risks, citing offshore offerings of up to 250 times leverage versus CME's 5 times.
Duffy criticizes the CFTC for approving Kalshi's perpetual futures in less time than the standard self-certification process, noting parallels to speculative excesses seen before the 2008 crisis.
Hyperliquid's HIP-3 perpetual contracts generated over $62 billion and 6.6% of global perpetual volume in May, highlighting the scale of offshore leveraged crypto trading compared to U.S. controls.

CFTC approval draws exchange criticism

As reported by The Block, Duffy says at the Piper Sandler Global Exchange & Fintech Conference that he has serious concerns about how the newly approved perpetual futures contracts are structured. He says some offshore markets offer leverage from 20 times to as high as 250 times, compared with roughly 5 times on CME crypto products, and warns that traders who do not fully understand the instruments could be wiped out.

Duffy also says he disagrees with the Commodity Futures Trading Commission's decision to allow the contracts. His comments come days after the CFTC approved the first perpetual futures tied to cryptocurrency prices, with Kalshi listing the products on May 29.

He compares current market behavior to conditions before the 2008 financial crisis, saying speculation is replacing other forms of market excess and could become a broader problem. He also criticizes the review process, saying the agency completed it in less time than a standard self-certification window that normally allows a listing after 24 hours if there are no objections.

Crypto derivatives market faces retail risk debate

Perpetual futures let traders take leveraged positions on an asset's price without an expiration date, unlike traditional futures that settle on a fixed maturity. That structure has helped make the products a major part of global crypto trading, especially on offshore venues.

Hyperliquid accounts for 6.6% of monthly perpetual volume in May, according to data cited in the source text. Its HIP-3 builder-deployed perpetual framework generates more than $62 billion in volume during the month, underlining the scale of activity outside more tightly controlled U.S. futures markets.

Duffy's warning adds to a wider debate over whether bringing perpetual futures into the U.S. market expands access responsibly or introduces a higher-risk trading format to a broader retail audience. For exchanges and regulators, the issue centers on how much leverage exposure is appropriate as crypto derivatives products move further into regulated U.S. venues.

In our earlier update on S&P 500 futures slipping ahead of the May jobs report, we noted that investors were dialing back risk as chipmakers lost momentum and markets awaited payrolls data for clues on the Fed’s next moves. That piece highlighted how rate-path uncertainty was weighing on tech-heavy futures while the jobs print was set to influence broader positioning into the next policy meeting.

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