CFTC Opens Review of Energy Perps After Bitcoin Move

TLDR

• The CFTC has opened a public comment period on energy perpetual futures, focusing on crude oil markets.
• The review comes less than a month after the regulator approved the first regulated Bitcoin perpetual futures in the U.S.
• The request for comment contains 67 questions covering pricing, funding rates, margin, and settlement issues.
• Regulators are examining how perpetual contracts would function when crude oil spot markets are closed.
• The CFTC raised concerns about weekend margin calls and the availability of payment infrastructure.

The U.S. Commodity Futures Trading Commission (CFTC) has opened a public comment process on energy perpetual futures. The move comes less than a month after the regulator approved the first regulated Bitcoin perpetual futures in the United States. The request seeks industry feedback on whether perpetual contracts can operate effectively in crude oil markets.

CFTC Seeks Industry Input on Energy Perpetual Contracts

The CFTC published a 22-page request for comment on June 22. The document contains 67 questions focused on perpetual energy futures. Regulators want market participants to address pricing, settlement, margin, and market structure issues.

The review follows recent developments in perpetual futures trading. On May 29, the CFTC approved regulated Bitcoin perpetual futures. Kraken later launched its CFTC-regulated perpetual products on June 15.

Perpetual futures differ from traditional futures because they do not expire. Instead, they use funding payments to keep contract prices close to spot prices. Therefore, regulators are examining whether that mechanism can function in energy markets.

The CFTC highlighted differences between Bitcoin and crude oil markets. Bitcoin trades continuously across global venues. As a result, exchanges can calculate reference prices throughout the day and weekend.

Bitcoin Approval Shapes the Latest CFTC Review

The regulator stated that Bitcoin’s continuous trading activity supported its perpetual futures approval. A constant reference price allows exchanges to maintain funding rate calculations. Consequently, the CFTC wants feedback on whether energy markets can provide similar pricing data.

Crude oil markets operate under different conditions. Physical oil trading occurs during defined periods rather than continuously. Therefore, weekend funding calculations present a challenge when no cash market price exists.

The request asks how exchanges should manage funding rates during market closures. It also questions how firms would process margin calls when traditional payment systems remain unavailable. Fedwire, for example, does not operate on weekends.

The CFTC also raised concerns about benchmark pricing. Regulators asked whether weekend perpetual trading could affect reference prices used by commercial hedgers. The agency requested industry views on possible market effects.

Another section revisits the April 2020 oil market disruption. During that event, WTI crude oil futures settled at negative $37.63 per barrel. The CFTC asked how a perpetual contract would respond, given that it lacks an expiration date.

The document also addresses collateral and settlement infrastructure. Regulators asked whether tokenized assets or stablecoins could support weekend margin requirements. The questions focus on maintaining operations outside traditional banking hours.

CFTC Chairman Mike Selig outlined the agency’s approach in a statement. He said the regulator supports “responsible innovation, while preserving the protections against manipulation and market disruption that participants and the public rely on.”

The review arrives as continuous trading expands across several asset classes. CME Group activated 24/7 crypto futures trading in late May. LMAX also introduced perpetual futures tied to gold with continuous XAU/USD trading.

Meanwhile, CME Group continues legal action against the CFTC. The exchange argues that perpetual futures meet the Dodd-Frank definition of swaps. The public comment period is expected to remain open for about 30 days after publication in the Federal Register.

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