Coinbase submitted a letter to the U.S. Commodity Futures Trading Commission and the Securities and Exchange Commission, requesting to clarify the boundaries between swaps and security-based swaps, and to explicitly classify stock perpetual derivatives as securities futures for listing on regulated venues in the U.S., rather than remaining offshore.

The letter is signed by Scott Bauguess and Julia Hueckel, and also requests the establishment of an alternative compliance framework, allowing exchanges under either commodities or securities systems to list event contracts related to securities. The company already has a designated contract market for commodity futures, Coinbase Derivatives, a futures commission merchant, Coinbase Financial Markets, and a securities broker, Coinbase Capital Markets. The U.S. has approved cryptocurrency perpetual-style futures by the Commodity Futures Trading Commission and is collaborating with prediction market platforms to include cryptocurrency perpetuals in the domestic regulatory list; new underlying assets still need to be discussed on a case-by-case basis. Stock perpetuals are already open to non-U.S. qualified users: settled in USD stablecoins, trading all week, with no expiration date, single stock leverage up to about 10 times, and exchange-traded funds up to about 20 times, including Apple, Microsoft, Alphabet (Google's parent company), Amazon, NVIDIA, Meta, Tesla, and some index funds. There are also pre-listing perpetuals, with SpaceX contracts having about 5 times leverage, and plans for themes like artificial intelligence and energy. U.S. users have seen index-style perpetual contracts available all week, with leverage up to about 20 times. The letter does not imply that the product has been approved for retail listing of single stock perpetuals in the U.S.

Who is buying and who is selling: The driving force is the jurisdictional competition, not that leverage can be used to buy Apple overnight across the U.S. The buyers want to trade stock risk all week on domestic platforms, while the sellers aim to move offshore perpetuals back to licensed exchanges. The beneficiaries are Coinbase, which holds both futures and brokerage licenses, while traditional brokers that still restrict stock leverage to time periods and margin accounts are under pressure. Funds are flowing from offshore perpetual transaction fees to U.S. regulated capital, with pricing power resting on who can write the definition of securities futures into the joint statement of the two commissions.

Source: Public Information