Kalshi was originally a platform for event prediction markets operating under the regulatory framework of the United States, but it has now extended its compliance efforts toward U.S. stock derivatives: Recently, it submitted documents to two federal regulatory agencies at once, proposing a rule change to the SEC while also submitting a proposal for perpetual futures contracts linked to U.S. stocks for review by the CFTC. Unlike traditional futures with an expiration date, these contracts have no set expiration date and rely on periodic payments between long and short positions to stay closely aligned with the spot price of the underlying stocks; Kalshi has clearly stated that this product will be classified as a security future, meaning any approval must pass through both the SEC and CFTC’s regulatory gates. As of the publication of related reports, the CFTC had not yet approved this proposal, and the progress and results of the review were all unclear. Around the same time, several Chinese media outlets reported that Coinbase also submitted a similar perpetual contract idea related to U.S. stocks, attempting to push the trading mechanisms already mature in the crypto market into the realm of stock derivatives regulated by both the SEC and CFTC, marking the beginning of a new game around “who qualifies to operate U.S. stock perpetuals within the U.S. regulatory framework.”
Crypto-style perpetual contracts enter the U.S. stock battlefield
On crypto trading platforms, perpetual contracts have long been the main attraction: with no expiration date, contracts can be held indefinitely, and both long and short parties pay or receive funding rates periodically, keeping the contract price tightly aligned with the current price of the underlying asset, rather than being “pulled back to reality” by a delivery date as traditional futures are. Traditional futures with a delivery date are just the opposite—contracts have a clear expiration date and ultimately settle through cash settlement or physical delivery, where the term structure itself is part of the pricing. The design of perpetual contracts breaks this time frame, allowing leveraged exposure to be maintained for long periods in high-volatility environments, leading the crypto market to view it as a high-leverage, high-volatility tool, also keeping it under the radar of regulatory agencies concerned about its risk spillover.
Kalshi is now attempting to directly transplant this mechanism into the U.S. stock market: the proposed contracts are linked to U.S. stocks, have no predetermined expiration date, and through periodic payments of funding rates between long and short positions, aim to keep the contract price consistent with the stock price, and be classified as securities futures subject to joint regulation by the SEC and CFTC. This product form, which primarily existed on crypto platforms, is making its debut in the realm of U.S. stock individual stocks, meaning that existing stock and futures participants are faced with a new type of exposure where the time dimension has been “erased”: Risk managers can no longer naturally constrain leverage using expiration dates, and institutions that rely on expiration rotations and term structure pricing must also reshape their understanding. For regulators, it signifies not only a new class of securities futures but could also become a new channel for high-leverage bets on U.S. stock individual stocks, compelling market infrastructure and risk assessment systems to reconsider how many crypto-native derivative designs the U.S. regulatory framework is willing to bring within its boundaries.
One foot in SEC and one foot in CFTC regulatory tug-of-war
In the U.S. capital markets, the division of regulatory responsibilities is clearly defined: individual stocks, traditional options surrounding individual stocks, and some derivatives fall under the securities domain, overseen by the SEC; while contracts appearing in the form of futures and certain types of derivative instruments fall within the CFTC’s purview. The issue arises when a product possesses both “security underlying + futures trading structure” attributes simultaneously, as it then slips into a so-called gray area of securities futures—such products are naturally positioned within the cross-regulation of the SEC and CFTC, where every design detail may touch the boundaries of both sets of rules.
Kalshi's choice proactively places itself in this “niche.” It publicly views perpetual futures contracts linked to U.S. stocks as securities futures, submitting a proposed rule change document to the SEC in an effort to incorporate this new structure with no expiration date, relying on funding rates to maintain price anchoring, into the existing framework of securities futures; at the same time, it submitted the same contract proposal to the CFTC for approval, hoping to gain “futures” legal status under the commodity futures regulatory system. As of the report, this proposal remains in the CFTC approval stage, with neither the results nor the timeline disclosed, meaning Kalshi must simultaneously meet the compliance requirements of both securities law and commodity futures law amid an uncertain dual process. For a platform that originated from event prediction, this signifies not only a sharp increase in compliance costs but also a test of institutional adaptability: Regulatory departments have no mature cases to reference for handling attempts to migrate perpetual contract mechanisms from the crypto market to U.S. stock individual stocks. Kalshi, along with Coinbase, which submitted a similar perpetual contract proposal at the same time, is jointly pushing this regulatory vacuum toward a critical point where “answers must be provided.”
Kalshi vs. Coinbase: Who secures the compliance initiative
The detail of submitting proposals on the same day transforms the event from “how regulators view U.S. stock perpetual contracts” into a race of “which type of platform secures a pass first.” Several Chinese media outlets noted that on the same day Kalshi submitted its proposal for perpetual futures contracts linked to U.S. stocks to the SEC and CFTC, the crypto-native trading platform Coinbase also submitted a similar type of proposal: on one hand, there’s a compliant platform already authorized to operate under the U.S. regulatory framework focused on event prediction, attempting to extend its business line from event outcomes to stock derivatives; on the other hand, there’s a crypto trading giant that has long grappled with U.S. regulatory agencies over licenses and product scopes, seeking to replicate the mature perpetual contract format from the crypto market into derivatives linked to traditional stocks.
What the two types of platforms are competing for is, in fact, the defining rights and initial access qualification for the “crypto derivatives × traditional assets” crossover track. For Kalshi, relying on its existing predictive market license to classify contracts as securities futures provides an opportunity to occupy a narrative of “regulated innovator”; for Coinbase, obtaining approval in this lane would mean that its license's value is no longer confined to the traditional sense of crypto trading, but connects directly to a broader capital market derivatives space. When reviewing, regulatory agencies will likely weigh the platforms' past compliance records, risk management capabilities, and investor protection mechanisms differently: If they respond differently in the future—such as opening channels for a certain type of platform first—it would create a significant first-mover advantage in market competition and effectively redraw the entry boundaries for crypto platforms and compliant predictive market participants in the field of traditional asset derivatives.
If the gates open, how will retail investors and platforms play?
Assuming that regulators ultimately choose to open this gate, once Kalshi's individual stock perpetual futures are truly incorporated into the securities futures framework by both the SEC and CFTC, the first change will be to the platform's business boundaries: extending from purely event outcome predictions to directional trades directly linked to U.S. stocks. Classifying the contracts as securities futures means that every transaction will have to comply with dual regulatory constraints—risk disclosure documents, margin management, abnormal volatility handling, and post-reporting must all be rewritten according to the requirements of both agencies. For the platform, this represents a transition from “compliant prediction” to “derivatives operator regulated by securities futures,” requiring adjustments to educational materials, interface designs, customer stratification, and risk control systems around this new identity.
For retail investors, the real change lies in the reconstruction of thresholds and risk structures. Perpetual contracts, with no expiration date and relying on funding rates to anchor stock prices, theoretically lower the margin trading threshold for participating in stock price fluctuations compared to traditional futures and options with expiration dates, but the holding costs become a dynamic variable that fluctuates with funding rates: high-frequency traders can exploit short-term discrepancies between funding rates and spot prices, while long-term holders must bear additional pressure from the reverse fluctuations of funding rates beyond stock price risk. In the crypto market, similar mechanisms have amplified volatility in extreme market conditions, which will become a reference point regulators cannot overlook when evaluating U.S. stock perpetual contracts. U.S. regulators typically require suitability assessments, leverage limits, and margin regulations for other high-risk derivatives. If perpetual contracts are approved, platforms will inevitably need to make significant efforts in entry-level stratification, risk warning pages, simulated trading, and educational content, as well as set hard limits on leverage and position sizes to find a new balance between “lowering participation thresholds” and “controlling systemic risks,” ultimately determining how far such U.S. stock perpetual contracts can go in the eyes of regulators against the inherent amplification of volatility effects from the perpetual mechanism.
Approval timeline remains a mystery: U.S. stock perpetual contracts still on the outside
In this round of exploration extending to traditional assets, both Kalshi and Coinbase’s proposals currently remain in the stage of “documents submitted, results pending”: Research briefs clearly indicate that the specific timeline for CFTC approval and expected decision dates are still blank, and the SEC's stance on the proposed rule change document has not been publicly disclosed either, making the direction of the regulatory dual towers a decisive variable for the entire track. A more realistic constraint lies in key terms like how funding rates will be calculated, what stocks they can cover, and how much leverage is allowed, which have not yet been disclosed, making it difficult for platforms to finely tune product parameters and risk control structures in the pre-setup phase; they can only make scenario assumptions without finalizing plans. Given that U.S. regulators have a consistent cautious and gradual approach to new types of derivatives, various divergences may emerge from small-scale pilots and strict thresholds to direct postponements or shelving. Industry participants in the waiting window cannot treat U.S. stock perpetual contracts as established trading tools but must regard them as yet-to-be-realized potential scenarios, maintaining a conservative stance in compliance architecture and risk positions to avoid overcommitting to a single path before regulatory conclusions are clear.
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