Ex-regulators warn of crypto market moving offshore

Ex-SEC and CFTC officials urge a risk-based approach to crypto derivatives, warning unclear rules could push the $90T perpetual futures market offshore and harm U.S. competitiveness.

Former SEC and CFTC officials are urging U.S. regulators to adopt a risk-based, streamlined approach to crypto derivatives regulation. They warn that overlapping or unclear rules could drive the lucrative $90 trillion perpetual futures market offshore, reducing U.S. competitiveness. As the SEC and CFTC work to define derivatives and clarify jurisdiction, the industry awaits new definitions that may shift where these products are traded. Kalshi estimates offshore perpetual futures trading reached $90 trillion in 2025, up from $28 trillion two years earlier. The SEC has also sent a revised crypto custody rule to the White House for review. With legislative efforts like the CLARITY Act stalled, officials emphasize the need for coordinated, principles-based oversight to protect investors without imposing excessive compliance burdens that could push activity abroad.