CFTC Warns 24/7 Derivatives Trading Risks for Traditional Markets

The U.S. CFTC issued a new advisory saying 24/7 derivatives trading and clearing may fit crypto, but it could harm traditional financial markets if applied broadly. The regulator’s core point is market structure. Unlike crypto’s continuous, cross-timezone trading, many traditional markets rely on fixed hours to concentrate liquidity and support orderly price discovery. The CFTC warns that moving to 24/7 derivatives trading without the right design could thin off-peak liquidity, raise intraday volatility, widen bid-ask spreads, and increase manipulation risk—especially in less liquid products. For crypto, the advisory is not a ban. The CFTC notes that blockchain-based assets can support round-the-clock operation due to globally distributed participants and crypto-native infrastructure (e.g., crypto collateral and stablecoins). But it stresses market-by-market evaluation rather than assuming the same approach works everywhere. Separately, Coinbase said a CFTC approval lets a regulated affiliate add crypto perpetual futures and global options to its regulated platform, expanding beyond existing 24-hour offerings. Meanwhile, the CFTC and Gemini asked a Manhattan court to vacate a $5 million settlement order tied to Gemini’s proposed Bitcoin futures contract. Trading takeaway: expectations for 24/7 derivatives trading in regulated crypto venues may keep growing, but regulators will likely scrutinize liquidity risk and surveillance controls for any extended-hours rollout beyond crypto.