Offshore Crypto Perpetuals Top $9 Trillion as Ex-Regulators Seek Lighter Rules
Offshore crypto perpetual contract trading exceeded $9 trillion in 2025, up sharply from about $2.8 trillion two years earlier, according to Kalshi. Former SEC and CFTC officials, including Chris Giancarlo, Brian Quintenz, Sharon Brown-Hruska and Steven Wallman, urged US regulators to apply similar rules to similar risks and reduce overlapping compliance requirements. They argued that a risk-based framework could encourage crypto liquidity to return to the US. The SEC and CFTC are currently seeking public input on the definitions of swaps, security-based swaps and emerging products, as well as the boundary between their jurisdictions. Separately, the SEC has submitted proposed revisions to investment adviser and investment company custody rules for review by the White House regulatory office. The proposal would clarify requirements for regulated firms providing digital asset custody services. The SEC’s broader crypto regulation proposal has been published in the Federal Register, with public comments open until 20 October. The regulatory debate could influence US crypto derivatives, digital asset custody and market liquidity, although the immediate trading impact is likely limited.
Neutral
The expected market impact is neutral because the article describes a regulatory consultation rather than a final rule or immediate enforcement action. The $9 trillion offshore crypto perpetuals figure highlights substantial demand for leveraged derivatives, but it does not directly change exchange access, margin requirements or token fundamentals. In the short term, traders may react positively to calls for a risk-based framework, particularly if they expect clearer rules and the possible return of US liquidity. However, uncertainty remains because the SEC and CFTC have not yet settled product definitions or jurisdictional boundaries. Derivatives traders may therefore maintain offshore exposure while waiting for concrete proposals. Similar regulatory consultations in the past have often produced brief volatility and narrative-driven rallies, followed by muted price action when implementation timelines remained unclear. Over the longer term, lower compliance costs and clearer digital asset custody rules could support institutional participation, improve market depth and narrow liquidity fragmentation between US and offshore venues. Conversely, stricter final rules could increase costs, restrict leverage or push more activity offshore. Bitcoin and major crypto assets may benefit indirectly from improved institutional access, but the article provides no immediate catalyst for a decisive directional move.