Coinbase Urges SEC, CFTC to Resolve Overlapping Jurisdiction on Perpetual Futures

Coinbase, the largest US cryptocurrency exchange, called for the Securities and Exchange Commission and the Commodity Futures Trading Commission to resolve overlapping jurisdiction to spur growth in perpetual futures and prediction markets in the US.

On Aug. 25, Faryar Shirzad, Coinbase’s chief policy officer, wrote on X that the company had submitted a response to the SEC and CFTC’s joint request for comment on product definitions for perpetual derivatives and alternative approaches to regulatory compliance.

Coinbase’s recommendations include a regulatory framework designed to promote consumer choice, market competition and innovation; classifying equity-based perpetual futures as security futures; and allowing exchanges regulated by either the CFTC or the SEC to list equity-related prediction market products.

Coinbase said it already offers perpetual futures and prediction market products, but is subject to conflicting rules because the SEC and CFTC have overlapping authority. The company argued that clarifying the legal definition of those products and each agency’s supervisory scope would reduce regulatory uncertainty.

Shirzad said resolving complex product definitions and overlapping jurisdiction is critical. He added that doing so would help bring related trading activity into US markets and safely offer investment opportunities to American consumers within a regulated framework.

He also said overseas markets have already built a significant innovation lead in perpetual derivatives, making regulatory changes necessary for the US to remain competitive.