Michael Selig draws a hard line between crypto perps and corn futures
Crypto perpetual futures can make sense in markets that trade nonstop and track a live spot price. Agricultural commodities are a different beast, and Michael Selig says the two should not be treated as the same thing.
- Crypto fit: perpetuals make more sense for digital assets than for crops
- Agriculture reality: physical delivery and limited trading hours still matter
- Regulatory stakes: futures, swaps, and event contracts sit in a messy legal gray zone
- Market impact: classification affects listing rules, reporting, clearing, and oversight
Speaking at the American Cotton Shippers Association Annual Convention on Tuesday, Selig said “24/7 trading and perpetual futures structures are not well suited to traditional agricultural markets that depend on physical delivery and operate during limited trading hours.” That is the point. Crypto markets run around the clock. Corn, cotton, wheat, and soybeans do not get to pretend harvest schedules are optional.
Perpetual futures, or “perps, ” are futures-like contracts with no expiration date. Traders can hold them indefinitely, and prices are usually kept near the spot market through a funding-rate mechanism, which creates periodic payments between longs and shorts. In crypto, that setup has become popular because it lets traders keep leveraged exposure open without rolling contracts forward every month.
That design is not an automatic fit for agriculture. Commodity producers and merchants use futures to hedge real-world production, storage, transport, and delivery risks. A farmer is not trying to play a 24/7 leverage game. He or she is trying to lock in a price for a crop that still has to be grown, harvested, stored, and shipped. That is a very different economic job description.
Selig’s framing was not a blanket rejection of innovation. He said what works for newer markets like crypto assets and prediction markets may not suit traditional asset classes like agriculture. That distinction matters because regulators tend to run into trouble when they try to force one market structure onto every market just because the industry found something exciting and hit “launch.”
The broader policy question is whether a crypto perpetual is a futures contract, a swap, or something else entirely under U.S. law. That is not semantic hair-splitting. If regulators classify a product as a swap rather than a futures contract, the venue may face different requirements for execution, reporting, clearing, and oversight. In other words, the label changes the rulebook, the regulator, and the business model.
The CFTC and SEC are trying to clean up some of that legal mess. The agencies have launched a joint public consultation covering swap definitions, security-based swaps, mixed swaps, event contracts, prediction market products, jurisdictional questions, swap exclusions, and alternative compliance frameworks. Put simply, they are reviewing which products belong under which regulator, and whether the old definitions still make sense for newer market structures.
Selig said the process could help resolve what he described as “longstanding ambiguities within Dodd-Frank.” That law’s derivatives provisions were built in the aftermath of the 2008 financial crisis, and they still govern a lot of the plumbing behind futures and swaps. When the plumbing is outdated, every new product becomes a test case, and every test case becomes a lawsuit waiting to happen.
SEC Chair Paul Atkins made a similar point, saying “additional regulatory clarity is overdue, including for event-based products.” That is the kind of line that sounds tidy in a press release and then turns into a much uglier argument once lawyers start asking who gets jurisdiction over what.
Meanwhile, crypto venues are already pushing ahead. The source says regulated crypto perpetuals are gaining traction on platforms including Kalshi, Coinbase, and Kraken. It also says the CFTC approved Bitcoin perpetual futures contracts for Kalshi and issued a no-action position allowing similar products on Coinbase, while Kraken launched perpetual futures for U.S. customers through its CFTC-regulated platform Bitnomial.
That kind of activity shows where the demand is. The source says crypto perpetual futures on Kalshi generated more than $8.5 billion in trading volume within weeks of launch. If that figure is measured as notional volume, it still points to the same thing: traders want exposure, and they want it now. Exchanges and venues are responding because ignoring demand is a fast way to become irrelevant.
Still, popularity is not the same thing as prudence. Perpetuals are built for continuous trading and leverage, which is exactly why they work so well in crypto and so awkwardly in physical commodity markets. They can also amplify liquidation cascades, funding-rate distortions, and speculative excess. That is the dark side of the shiny new toy. It looks efficient right up until everyone is overlevered and the market starts chewing through itself.
The product debate is now reaching legacy exchanges too. CBOE has begun evaluating whether its Bitcoin and Ether futures products could be converted into perpetual contracts. That tells you the market is not just a crypto-native sideshow anymore. Major venue operators see that traders want perpetual-style exposure, and they do not want to be stuck handing business to smaller competitors with looser plumbing and sharper elbows.
At the same time, the fight over who gets to approve these products is moving into court. CME Group has filed a lawsuit against the CFTC in the U.S. District Court for the District of Columbia, arguing that the agency’s approvals violated the Commodity Exchange Act. So the question is being answered in three places at once: through market launches, through regulatory consultation, and through litigation. Bureaucracy loves a three-front war almost as much as lawyers do.
The political backdrop is just as important. The source says President Donald Trump has not appointed additional commissioners, leaving Michael Selig as the CFTC’s sole commissioner and chair. That makes any major policy push harder, because a thinly staffed regulator has less room for internal debate, less institutional cushion, and more pressure on one person to define the agency’s direction. If that staffing picture changes, so could the tone of the entire debate.
Then there is the Digital Asset Market Clarity Act, or CLARITY Act. The U.S. Senate is expected to consider it in the coming weeks, and it could redraw the boundary between the CFTC and SEC for digital asset markets. For crypto, that matters because regulatory classification affects listing approval, custody, trading venue registration, and what kind of product can be offered without getting buried under enforcement risk.
The bigger takeaway is not that perpetuals are good or bad in some universal sense. It is that market structure matters, and context matters even more. A perpetual contract can be a sensible tool for crypto traders because crypto trades continuously and often references a deep, active spot market. A perpetual contract is a much clunkier fit for agricultural commodities, where physical delivery, harvest cycles, and limited trading hours are not optional details but the whole point.
That is the line Selig is drawing. Crypto can have its perps. Corn does not need to cosplay as a 24/7 leverage token.
Key takeaways
-
Why does Selig think crypto perps fit crypto better than agriculture?
Because crypto trades continuously and perpetuals can track a live spot market, while agricultural commodities depend on physical delivery, harvest timing, and limited trading hours. -
What is a crypto perpetual future?
It is a futures-like contract with no expiration date. Traders can keep positions open indefinitely, usually with a funding-rate mechanism that helps keep the contract price near spot. -
Why does futures vs. swaps classification matter?
The label determines which legal framework applies, including rules for execution, reporting, clearing, and oversight. In U.S. derivatives law, that is a very big deal. -
Are regulators treating crypto perps as a blanket approval?
No. The available material points to a narrow crypto-specific framework, not a green light for perpetuals across every asset class. -
What is the main risk of perpetual futures?
Leverage. Perps can magnify gains, but they also amplify liquidations, funding-rate pressure, and market stress when things go sideways. -
Why does the CLARITY Act matter?
It could help settle the CFTC-versus-SEC turf war over digital assets, which would affect how crypto products are listed, regulated, and built in the U.S.
The crypto industry should welcome clarity, but not confuse clarity with carte blanche. Perpetuals may belong in digital asset markets. They do not automatically belong in every market with a ticker and a trading screen. Sometimes the old structure exists because reality is still a thing, even if Wall Street and crypto Twitter would both prefer otherwise.
Further reading
A few useful regulator and reporting sources for anyone tracking where perpetuals, event contracts, and crypto market structure are heading.
- CFTC factsheet on derivatives and market oversight
- Michael Selig: Balancing Innovation and Tradition in American Agriculture
- Reuters coverage of the CME-CFTC dispute over perpetual futures
- Katten analysis of perpetual futures coming onshore under CFTC rules
- The Next Phase of Project Crypto: Unleashing Innovation
