CFTC says some derivatives markets may not suit 24/7 trading
The CFTC has warned regulated derivatives platforms that round-the-clock trading may suit crypto-native markets but may not work safely across every traditional asset class.
- The CFTC warned that 24/7 trading may not suit every traditional derivatives market.
- Coinbase said the CFTC approval adds crypto perpetuals and global options to its regulated platform.
- The CFTC and Gemini asked a Manhattan court to vacate a $5 million settlement order.
The CFTC said in a Friday advisory that exchanges and clearinghouses should carefully assess products before extending trading and clearing to a 24/7 model. The agency said some markets can support constant access because newer trading systems use blockchain networks, decentralized infrastructure, crypto collateral, stablecoins, and mobile platforms.
The warning came as the agency also allowed CFTC-regulated crypto platforms to offer perpetual futures and global options.Coinbase said in a Friday blog post that the approval lets one of its regulated affiliates add the largest and most liquid category of global crypto trading to its existing 24-hour platform.
CFTC draws line between crypto and traditional markets
According to the advisory, the agency does not view all markets the same way regarding permanent trading hours. The CFTC said agricultural derivatives may face different limits because of their customer base, regional structure, and specialized hedging practices.
The agency said some products could face thinner liquidity during off-peak hours. Under those conditions, the CFTC said markets may experience greater price swings, wider bid-ask spreads, and greater exposure to manipulation.
Under CFTC rules, trading platforms remain the first line of defense against market abuse. The agency said firms that expand trading hours should add compliance controls tailored to the risks posed by constant access.
Agency Asks Firms to Discuss 24/7 Plans
In its letter, the CFTC urged regulated exchanges and clearing organizations to speak with the agency before making major changes to trading schedules. The advisory framed those discussions as part of the agency’s oversight role, especially as market structures around crypto products change.
CFTC Chairman Mike Selig has made crypto, prediction markets, and new trading technology central issues at the agency. Under his leadership, the regulator has made several crypto policy decisions as the Trump administration pushes federal agencies to provide the digital asset industry with a clearer path.
Coinbase said its platform already supports 24/7 trading across equities, futures and prediction markets. The company said the new approval adds crypto perpetuals and global options to that lineup through a CFTC-regulated affiliate.
Gemini settlement reversal adds to policy reset
The same policy environment has also affected older enforcement cases. As previously covered by crypto.news, the CFTC moved to scrap its $5 million settlement with Gemini after deciding the case should not have been brought under the agency’s current standards.
According to a joint motion filed Wednesday in Manhattan federal court, the CFTC and Gemini asked a judge to vacate the January 2025 consent order. The order had resolved allegations linked to Gemini’s proposed Bitcoin futures contract.
The request shows how the agency’s current leadership is reviewing past crypto actions while opening more room for regulated digital asset products. The CFTC is prepared to allow 24-hour crypto markets, but it wants traditional derivatives platforms to prove that constant trading will not weaken market oversight.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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