Retail investors are driving significant volumes of trading through crypto perpetual futures as consumer advocacy organizations work to influence the regulatory framework surrounding these high-risk products.
These organizations are not only lobbying Congress but also interacting directly with regulators through comment letters, court briefs, and calls for stricter industry regulations before rules are finalized.
One of the prominent advocacy groups is Better Markets, a Washington-based nonprofit led by former Skadden attorney Dennis Kelleher. The organization has submitted over 500 comment letters to financial regulators and self-regulatory bodies, with its recommendations cited more than 180 times in final rules. Better Markets also regularly files court briefs advocating for tighter financial regulations.
Better Markets aims to balance the influence of Wall Street in the policymaking process by engaging with the White House, Congress, and federal regulators. Recently, it wrote a comment letter opposing a proposal by the National Credit Union Administration regarding crypto-related risks, claiming that the proposal could expose credit unions to significant risks without adequate safeguards.
Christopher Appel, Director of Banking Policy, stated, “The NCUA’s GENIUS Act stablecoin proposal repeats the same mistakes Better Markets has already identified with the OCC, FDIC, and Treasury stablecoin proposals—no meaningful capital or liquidity standards, inadequate reserve diversification requirements, and a failure to address the significant financial stability risks associated with stablecoins.”
While the letter does not specifically address perpetual futures, it illustrates how advocacy organizations can shape regulations well before they are enacted. These groups have the potential to influence the wording of federal regulations through formal comments, lawsuits, and constant communication with relevant authorities.
As trading in perpetual futures has become one of the most significant segments of the crypto market, regulators are paying closer attention. Perpetual futures are a type of derivative with no expiry date, allowing traders to maintain leveraged positions indefinitely through a funding-rate mechanism that aligns prices with the underlying spot market, according to Chainalysis.
Research from Cornell University indicates that approximately 93% of trades in the crypto derivatives market involve perpetual futures. Centralized exchanges processed $86.2 trillion in perpetual futures volume last year, a 47% increase from the previous year, while decentralized exchanges reported trading volumes of $6.7 trillion, representing a 346% increase.
The Financial Times has described perpetual futures as the “most dangerous product in crypto,” highlighting the increased scrutiny from regulators as trading volumes surge.
