Coinbase files response to CFTC and SEC on perpetual derivatives, pushing for clearer regulatory lines

Coinbase submitted a comment letter to both the CFTC and SEC on August 25, responding to the agencies’ joint Request for Comment on how to define “swap” and “security-based swap.” The exchange’s core argument: the current regulatory overlap between the two agencies is creating a jurisdictional fog that keeps innovative derivatives products stuck offshore while the rest of the world trades them freely. The letter, signed by Scott Bauguess and Julia Hueckel, lays out three specific recommendations designed to untangle the mess. Coinbase wants alternative compliance frameworks, a formal classification of equity perpetual derivatives as security futures, and permission for either CFTC or SEC-regulated exchanges to list securities-related event contracts. What Coinbase is actually asking for Perpetual derivatives are, in the simplest terms, futures contracts that never expire. Unlike traditional futures with a set settlement date, perpetuals let traders hold leveraged positions indefinitely, with periodic funding payments keeping the contract price tethered to the underlying asset. They’ve become the dominant instrument in offshore crypto trading for years, but US-based platforms have l...