Coinbase calls on CFTC and SEC to end regulatory tug-of-war over perpetual futures and prediction markets

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Coinbase calls on CFTC and SEC to end regulatory tug-of-war over perpetual futures and prediction markets

Coinbase has formally asked U.S. regulators to resolve the jurisdictional overlap that currently clouds the legal status of perpetual futures and prediction market products. In a comment letter submitted to the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), the exchange outlined recommendations aimed at establishing clear, workable rules for these increasingly popular digital asset derivatives.

Coinbase’s key proposals

The letter, made public on March 10, 2026, responds to a joint request from the two agencies for public input on how to define and oversee perpetual futures contracts. Coinbase’s chief policy officer, Faryar Shirzad, summarized the exchange’s position on X, highlighting three main recommendations:

• Develop a unified regulatory framework that promotes consumer choice, market competition, and innovation.
• Classify equity-based perpetual futures products as security futures, subject to SEC jurisdiction.
• Allow exchanges regulated by either the CFTC or the SEC to list equity-related prediction products, as long as they meet the relevant agency’s standards.

Shirzad noted that Coinbase already offers both perpetual futures and prediction market products, but the current regulatory environment forces the exchange to navigate conflicting rules. The CFTC and SEC have been locked in a jurisdictional dispute over these products, leaving market participants without clear guidance.

The broader regulatory context

The request for public input comes amid a broader push by U.S. regulators to modernize oversight of digital assets. Perpetual futures—contracts without an expiration date that allow traders to speculate on price movements—have become a mainstay of crypto trading, particularly on offshore platforms. Prediction markets, which allow users to bet on the outcome of events ranging from elections to economic data releases, have also grown in popularity, drawing scrutiny from both agencies.

The CFTC has historically claimed oversight of commodities-based derivatives, while the SEC has jurisdiction over securities. The rise of products that blend characteristics of both has created a gray area. For example, equity-based perpetual futures tied to stocks or stock indices could be viewed as either commodity derivatives or security futures, depending on the underlying asset and how the contract is structured.

Why this matters to traders and the industry

For traders, the lack of regulatory clarity creates uncertainty about the legality of their positions and the protections available to them. For exchanges, it complicates compliance and can stifle innovation, as firms may hesitate to launch new products without knowing which agency will assert authority.

Coinbase’s letter is notable because it offers a concrete path forward, rather than simply complaining about the status quo. By proposing that equity-based perpetual futures be treated as security futures, Coinbase acknowledges the SEC’s role while also advocating for a more streamlined approach that would allow exchanges to operate under a single regulator for a given product.

What happens next

The CFTC and SEC have not yet indicated when they will issue formal guidance or rulemaking. However, the public comment period is a critical step in the process, and industry responses like Coinbase’s will likely shape the final outcome. Market participants should monitor the agencies’ next moves, as any clarification could have significant implications for the trading of these products in the United States.

Conclusion

Coinbase’s comment letter underscores the urgent need for regulatory coherence in the digital asset space. By proposing a clear division of authority and advocating for consumer choice, the exchange is pushing for a framework that could reduce uncertainty and foster innovation. The CFTC and SEC’s response will be closely watched by the entire crypto industry, as the outcome will set the tone for how these products are regulated for years to come.

FAQs

Q1: What are perpetual futures?
Perpetual futures are derivative contracts that allow traders to speculate on the price of an underlying asset without an expiration date. They are commonly used in cryptocurrency markets and can be settled in cash or physical delivery, depending on the platform.

Q2: Why are the CFTC and SEC fighting over these products?
The CFTC regulates commodity derivatives, while the SEC oversees securities. Perpetual futures and prediction markets can involve assets that fall into either category, creating a jurisdictional gray area. The agencies are seeking to clarify which one has authority over these products.

Q3: How could Coinbase’s proposal affect traders?
If adopted, Coinbase’s recommendations could provide clearer rules for exchanges and traders, reducing legal uncertainty and potentially leading to more innovative products. However, any new framework will also come with compliance requirements, which could affect how these products are offered and traded.

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