WASHINGTON, D.C.— Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with the Commodity Futures Trading Commission (CFTC) approving Kalshi’s spot bitcoin perpetual futures contract: 

 “The CFTC continues to show that it will give the crypto industry and the prediction markets industry anything they want. Today, the CFTC approved Kalshi’s perpetual futures contract on spot bitcoin despite perpetual futures being one of the most dangerous crypto products for retail investors.  And it did so without establishing any enhanced investor protections. 

“Unlike most futures contracts, which have a set expiration date, perpetual futures are open indefinitely; this means that they are not designed for hedging or long-term risk management and instead contain numerous features that make them unsuitable for retail investors: 

• The use of leverage allows retail investors to own positions worth far more than the capital they invest, which can lead to sudden and severe liquidations. 

• The 24/7 nature of perpetual futures exposes investors to continuous volatility at a time when financial backstops are less accessible and regulators are unavailable. 

• Without expiration dates to impose discipline, perpetual futures facilitate continuous speculation and potentially overtrading, rapid losses and financial harm. 

“We warned the CFTC about these risks in our comment letter last year. Perhaps most importantly, we warned that retail investors were unlikely to fully appreciate the risks posed by perpetual futures and urged the CFTC to require enhanced disclosures that would be understandable to retail investors. The CFTC not only failed to require such enhanced disclosures but seems to have entirely ignored the risks that the product it approved poses.  

“This might be what Kalshi and other purveyors of perpetual futures want, but it is unbecoming of an agency that is supposed to act as a regulator. Still, it is not surprising given that crypto and prediction market companies now advise the CFTC on not one but two advisory committees. At this point, it is clear that the CFTC works not in the public interest or for the protection of investors but for the very industries it is supposed to regulate.”  

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.