Mike Selig, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), took to platform X to address and clarify several misconceptions surrounding perpetual futures contracts, while also responding to the recent controversy over the CFTC’s approval of related contracts. Selig stated that neither the Commodity Exchange Act nor CFTC regulations explicitly require a “futures contract” to have a fixed expiration or delivery date. Since Congress did not provide a clear definition of the term, the classification of futures contracts has primarily relied on judicial precedents and CFTC interpretations, and a fixed expiration date is not a necessary condition. In response to claims that the CFTC-approved BTCPERP contract allows U.S. users to trade with 250x leverage, Selig explained that high leverage is not an inherent feature of the perpetual contract structure itself, but rather a characteristic of previous offshore trading platforms. Perpetual contracts under CFTC oversight will adhere to the same leverage limits as other regulated futures products. Addressing concerns that the CFTC failed to offer industry participants an opportunity for input and feedback, Selig noted that in April 2025, the CFTC published a request for public comment on “perpetual contracts” and “24/7 trading,” and received over 100 responses from industry participants, including multiple CFTC-registered entities. Regarding the view that the funding rate mechanism could lead to high costs and incentivize unfavorable market behavior, Selig argued that when factoring in costs associated with opening and rolling over traditional dated futures contracts, the annualized cost of holding a perpetual contract is essentially comparable to that of traditional futures. In fact, the funding rate mechanism helps maintain market stability.