As retail investors drive record volumes in crypto perpetual futures, US-based consumer advocacy organizations are ramping up efforts to influence regulations surrounding these high-risk financial instruments.
Advocacy groups shape policy behind the scenes
Instead of focusing solely on congressional lobbying, advocacy groups are pursuing formal avenues to impact regulation. Their methods include submitting public comment letters, filing court briefs, and encouraging federal and state regulators to impose strict measures before new rules go into effect for digital asset markets.
Among the most vocal organizations is Better Markets, a nonprofit headquartered in Washington, DC. Led by Dennis Kelleher, who previously worked as an attorney at Skadden, the group advocates for stronger oversight across financial markets, including crypto products.
According to Better Markets, it has submitted over 500 comment letters to regulators, with its recommendations cited more than 180 times in final rules. The group also frequently files court briefs to support tighter regulations.
In July 2026, Better Markets addressed the National Credit Union Administration’s proposed stablecoin policy, expressing concerns about potential exposure to crypto risks. Christopher Appel, the organization’s Director of Banking Policy, argued that the policy would introduce significant risks to credit unions absent adequate protections.
Christopher Appel criticized the NCUA’s GENIUS Act stablecoin proposal, noting repeated problems such as the absence of clear capital standards, insufficient reserve diversification, and limited measures to address broader financial stability risks tied to stablecoins.
While this letter focused on stablecoins, it illustrates the ways advocacy groups seek to shape future digital asset regulations long before they are implemented. Their ongoing dialogues with federal agencies, use of legal action, and sustained policy engagement can influence the precise wording of new rules—including those still developing around crypto perpetual futures.
These efforts are drawing more attention as perpetual futures continue to operate without explicit regulation from US authorities.
Regulatory attention on rising perpetual futures activity
Perpetual futures have rapidly become one of the central components of the cryptocurrency market, prompting increased scrutiny from regulators. Unlike traditional futures contracts, perpetual futures lack an expiration date, letting traders hold leveraged positions indefinitely through a funding-rate mechanism that aligns contract prices with those on the spot market.
According to research from Cornell University, about 93% of crypto derivative trades involve perpetual futures. Data from a16z, a venture capital firm active in the crypto sector, reports that centralized exchanges processed $86.2 trillion in perpetual futures trading volume last year—up 47% compared to the year before. Decentralized exchanges also marked substantial gains, recording $6.7 trillion in volume, which represents a 346% increase from the previous year.
| Platform Type | Perpetual Futures Volume (Last Year) | Year-on-Year Change |
|---|---|---|
| Centralized Exchange | $86.2 trillion | +47% |
| Decentralized Exchange | $6.7 trillion | +346% |
Major publications, such as the Financial Times, have described perpetual futures as some of the most dangerous instruments in crypto, underscoring the rising concerns among policymakers and investors alike.
Main risks for retail investors
Consumer advocacy organizations identify several core risks tied to crypto perpetual futures:
- High leverage: Some trading platforms offer leverage up to 100×, so even a 1% adverse price move can eliminate a position entirely.
- Constant trading: Crypto perpetual futures trade 24/7, unlike traditional markets. This constant access increases the chance that sudden losses can occur outside of normal trading hours.
- Automatic liquidation: When margin requirements are breached, systems can liquidate positions automatically, often before traders have a chance to respond during volatile markets.
- Funding-rate payments: Since there is no expiration, traders periodically pay or receive funding to keep contract prices tied to underlying spot values. These costs add up, especially for long-term positions, and may result in significant losses.
Platforms routinely allow leverage from 1x up to 100x or more. Chainalysis, a blockchain analytics company, highlights how rapidly positions can be liquidated under volatile conditions, potentially causing large and rapid losses for investors.
Cornell University research found that while perpetual futures bring added liquidity to crypto markets, the funding-rate system and widespread leverage use often increase trading costs and risk for participants.
Mini dictionary: Funding-rate mechanism, a system used in perpetual futures contracts to keep the price of the derivative aligned with the underlying asset’s spot price by requiring traders to pay or receive periodic payments based on the difference between the contract and spot prices.
Advocates warn that many retail traders underestimate the dangers from high leverage, automatic liquidation features, and the continuous nature of these markets.
Unresolved regulatory landscape
Discussions about how to regulate perpetual futures in the United States remain ongoing. Chainalysis notes that most perpetual futures trading takes place on offshore exchanges beyond direct reach of US authorities, while a16z points out that major centralized and decentralized platforms currently restrict US customers from accessing these products directly.
The Commodity Futures Trading Commission, responsible for overseeing derivatives in the US, faces limited enforcement options as trading activity remains concentrated overseas.
Although economist Robert Shiller first proposed the perpetual futures concept in 1993, and crypto versions gained popularity in 2016 after BitMEX’s launch, US regulation has not yet caught up to the realities of global trading.
Retail participation has grown steadily, with real-world asset-based perpetual futures now accounting for 44% of volumes on some exchanges such as Hyperliquid. This increasingly globalized and decentralized trading environment intensifies the divide between how and where these products are used and where authorities have jurisdiction. Consumer groups argue that this gap leaves investors vulnerable and motivates their push for stricter oversight.
As perpetual futures remain among the most debated and risky products in crypto finance, advocacy organizations continue to push for rules that account for high leverage, round-the-clock activity, and mechanisms that can quickly erase retail capital.
