Hyperliquid, Kraken, Coinbase: why crypto perps worry Wall Street
The CFTC's decision to authorize perpetual contracts on US stocks is sparking a legal battle on Wall Street. Citadel Securities and Cboe contest this opening to crypto platforms, which they accuse of circumventing…
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https://cryptoast.fr/perps-actions-cftc-citadel-cboe-justice-europe/
Wall Street is torn apart over a crypto product. The American regulator of derivatives markets has just authorized perpetual contracts on stocks, leveraged products with no maturity date. A development that could disrupt traditional markets, according to Hubert de Vauplane, associate lawyer at Morgan Lewis, interviewed by Cryptoast.
What's the point of still having a Nasdaq if I can do the same thing tomorrow on Hyperliquid?
On November 3, the Commodity Futures Trading Commission (CFTC) classified these products as security futures, securities futures contracts supervised jointly with the SEC.
A perpetual contract allows you to speculate on the rise or fall of a stock, without holding it. Unlike a CFD, generally concluded with a broker, perps put buyers and sellers in contact, explains the lawyer.
The CFTC prepared the ground in May by approving a Bitcoin perp proposed by Kalshi. The platform now offers contracts on several US stocks, while Coinbase and Kraken, via Bitnomial, seek to position themselves.
Kraken also offers tokenized stocks, another way to access stocks from a crypto platform.
This opening provokes an outcry. A coalition bringing together Citadel Securities, Cboe and the Healthy Markets association immediately challenged the decision in court. The CME, a giant of the Chicago futures markets, has already been suing the CFTC since June.
For Hubert de Vauplane, behind the regulatory arguments are mainly economic interests.
They want to protect their business first. It’s true of bankers, it’s true of brokers.
Perps could in fact divert part of the volumes from traditional stock exchanges to crypto platforms.
Cboe defends another reading. Its managing director, Craig Donohue, insists on investor protection and compliance with the regulatory framework.
Machine-translated from French
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