CFTC Seeks Input on 24/7 Futures, Energy Perpetuals Trades | John Lothian News
First Read Hits & Takes John Lothian & JLN Staff The Commodity Futures Trading Commission is seeking public comment on the potential expansion of 24/7 trading and perpetual futures (“perps”) contracts in traditional energy derivatives, as it evaluates risks associated with growing use, particularly on offshore platforms that may attract leveraged retail participation. According to […]
First ReadHits & TakesJohn Lothian & JLN StaffTheCommodity Futures Trading Commissionis seeking public comment on the potential expansion of 24/7 trading andperpetual futures(“perps”) contracts in traditional energy derivatives, as it evaluates risks associated with growing use, particularly on offshore platforms that may attract leveraged retail participation. According to a Bloomberg story by Lydia Beyoud,the agency is examining how round-the-clock trading and non-expiring contracts could affect market stability, pricing, and oversight amid concerns raised by major exchanges likeCME GroupandIntercontinental Exchangeabout unregulated competitors such asHyperliquid. The CFTC emphasized that while perpetuals appeal to institutional traders for their simplicity, their broader adoption raises regulatory and risk-management questions, particularly as similar crypto-linked products have already begun to receive limited approval in the US. Western intelligence agencies warn that advanced AI will soon enable adversaries to mount cyberattacks that could rapidly overwhelm current government and corporate defenses. They urge organizations to start using AI to harden their own security rather than wait. The article isby Mehul Srivastava in the Financial Times,reporting on a rare joint communique from the Five Eyes alliance of the US, UK, Canada, Australia, and New Zealand. According to the piece, the Five Eyes cyber chiefs say, “the timeline is not years, it is months,” arguing that frontier AI models will “fundamentally” change both offensive and defensive cyber capabilities as commercial systems are integrated into militaries and intelligence services. They note that the West is currently ahead in cutting‑edge AI, but that China, Russia, and other adversaries are rapidly catching up, and that attackers are already using AI to discover software vulnerabilities and scale more adaptive, simultaneous operations. The article cites Google’s Threat Intelligence Group, which recently documented what it believes to be the first AI-developed zero‑day exploit, as evidence that an AI‑driven arms race in cyber offense is underway, and it highlights how Five Eyes officials are pressing companies to reduce legacy weaknesses and actively adopt AI tools in their security operations, warning that those who delay will face “growing and avoidable risk. ”I am not alone in writing about perpetual futures. The Wall Street Journal weighed in today, James Davies wrote an article titled “Swap or Future?” and the law firm Dechert wrote a report. Perpetual futures(“perps”), derivatives that trade 24/7, never expire, and allow significant leverage, are rapidly gaining traction in the U. S. after regulatory approval, driving billions in trading volume and pressuring traditional exchange operators’ stocks while sparking a legal battle led byCME Groupagainst the CFTC. An article from The Wall Street Journal by Krystal Hur and Vicky Ge Huangexplains that supporters see perps as a competitive, flexible alternative to traditional futures, while critics warn that their leverage, funding-rate mechanics, and automatic liquidation features could amplify market volatility and investor losses, especially during sharp downturns, highlighting a broader clash between innovation and risk control as major exchanges weigh whether to adopt or resist the new product. A June 22, 2026 articlebyJames Daviesin Clearing without Socialised Losses explains CME’s lawsuit against the CFTC challenging its approval of Kalshi’s bitcoin perpetual as a futures contract, framing the dispute around a single question: whether perpetuals are legally swaps or futures. Davies describes how perpetual contracts differ from traditional futures by lacking an expiration date and instead using continuous funding payments to track spot prices, and emphasizes that this classification determines everything from margin requirements and regulatory burden to tax treatment, making the case economically significant beyond a single product. The article outlines CME’s argument that perpetuals meet the statutory definition of swaps because of their indefinite duration and payment structure, while the CFTC counters that features such as standardization, clearing, and tradability make them futures despite the absence of a fixed delivery date. Davies situates the case within a broader regulatory shift, noting the CFTC’s apparent reversal from prior enforcement positions and the rapid onshore expansion of crypto perpetuals, and highlights that the real stakes lie in market structure, especially how these instruments are margined and cleared, raising deeper questions about how to safely manage risk for contracts that never expire. A2026 Dechert OnPointreport from the more than 150-year-old law firm on June 22 explains that CME has sued theCFTCto overturn its approval of Kalshi’s bitcoin perpetual contract as a futures product, arguing that these instruments should instead be regulated as swaps due to their lack of expiration and reliance on ongoing funding payments. The report is authored by Megha Kalbag, Audrey Wagner, Dale C. Beggs, and Jillian Ran. CME contends that the CFTC violated the Administrative Procedure Act by reversing prior policy without adequate explanation and effectively deferring toKalshi, while also enabling other exchanges to self-certify similar products as futures, a shift that could significantly alter regulatory burdens, tax treatment, and competitive dynamics in digital asset derivatives markets. South Korean stocks plunged about 10% from record highs, led by sharp drops of over 12% in the chip giants SK Hynix and Samsung Electronics, as heavy foreign selling, forced liquidations tied to margin debt, and volatility from leveraged ETFs triggered a broad market rout and even a temporary trading halt. The report,from Bloomberg by Youkyung Lee and Sangmi Cha,explains that more than $2. 5 billion in foreign outflows and record-high retail leverage amplified the decline, while a surge in trading volume and a volatility gauge near 90 highlighted how unstable the previously top-performing market has become. The selloff was fueled by profit-taking after a strong rally, spillover weakness from U. S. tech stocks, and concerns around semiconductor demand and production shifts, though retail investors aggressively bought the dip, underscoring the market’s increasingly retail-driven and highly volatile nature. Anthony Scaramucciarguesin a June 22 LinkedIn postthat the mid-20th-century “Great Compression,” when American workers broadly shared in rising prosperity, was not the result of better values but of temporary structural conditions: U. S. industrial dominance after World War II, strong unions, limited global capital mobility, and government policies that expanded middle-class assets. Scaramucci explains that once global competition returned, capital became mobile, unions weakened, and finance expanded, shifting income gains from labor to owners. He contends that trying to recreate that era is unrealistic and instead proposes modern solutions to restore broad prosperity: making workers equity owners in companies, creating a sovereign wealth fund that pays citizens dividends (especially from AI-driven gains), equalizing tax treatment of labor and capital income, and reducing the rising costs of housing, healthcare, and education. The core idea is to focus on reshaping how income and ownership are distributed going forward, rather than redistributing existing wealth, so that workers once again share in economic growth even in a globalized, technology-driven economy. Here are the headlines from in front of FOW’s paywall from some recent stories:Broadridge appoints EY partner as co-president of digital assetsSFC proposes introducing investor identification regime for exchange-traded derivativesAmerican Farm Bureau raises alarm over Kalshi’s commodity event contractsTradeweb launches spread-based execution for European credit portfoliosAI should help firms add, not cut, jobs – Sphere chiefRipple secures preliminary MiCA licenseSGX grows daily leverage certificates offering with precious metals expansionMoonPay buys Entendre to expand digital asset infrastructureJPX’s clearing arm joins Securities Finance Association in APAC pushBullish lists SoFi bank’s stablecoinFranklin Templeton completes acquisition of 250 DigitalICE, OKX form joint venture to build tokenised financial productsCFTC seeks public input on 24/7 trading, energy perpetual tradesCITIC’s subsidiary becomes OTC Clear’s first USD/CNH swap clearing clientEuroclear re-appoints finance veteran Eric Lombard as non-executive directorHave a great day and stay safe and treat people the same way you want to be treated: with respect, equality, and justice. ~JJL*****Our most-read stories from our previous edition ofJLN Optionswere:Perpetual Futures and the Illusion They Were Built to Escapefrom John Lothian News. Charles Schwab Breaks Into the Prediction Market Businessfrom The Wall Street Journal. OCME’s Lawsuit Against CFTC Exposes the Age of Some Regulatory Definitionsfrom DeFi Rate. ~JBSubscribe to the JLN Options NewsletterHERE(it’s free). ++++Perpetual Futures and the Illusion They Were Built to EscapeWILLIAMS BAY, WI (JLN) ― June 22, 2026: The story of perpetual crypto futures begins not with a brilliant product design but with a structural failure in the asset class they were supposed to track. When centralized cryptocurrency exchanges began operating in earnest in the early 2010s, they promised traders direct participation in a new decentralized monetary system built on blockchain technology. The appeal was powerful, peer-to-peer, trustless, and immutable. But the moment a retail trader deposited bitcoin or any other token onto an exchange to trade it, that promise dissolved. The blockchain was left behind. What happened next occurred entirely inside the exchange’s internal ledger, as opaque and centralized as any traditional clearing system, stripped entirely of the protections blockchain was supposed to provide. Traders were not holding bitcoin; they were holding an IOU from an operator whose books they could not inspect, whose custody practices they could not audit, and whose insolvency or malfeasance could wipe them out overnight. The decentralization that made crypto alluring was, for exchange traders, an illusion from the start.