Here is the latest update on Kraken’s application for a CFTC-regulated perpetual futures product in the U.S.
Frequently Asked Questions
Here is a list of FAQs regarding Krakens filing to launch a US regulated perpetual futures product under the CFTC
General Definition Questions
Q What exactly is Kraken trying to do
A Kraken has filed paperwork to offer perpetual futures contracts to US customers These are crypto derivatives that will be regulated by the Commodity Futures Trading Commission which is a major federal regulator
Q What is a perpetual future
A Its a contract to buy or sell an asset at a future date but unlike traditional futures it has no expiration date You can hold it for as long as you want as long as you have enough money in your account to cover the position They are typically traded with leverage
Q How is this different from buying Bitcoin directly on Kraken
A When you buy Bitcoin directly you own the actual coin With a perpetual future you are trading a contract based on the price of Bitcoin You dont own the underlying Bitcoin and you can use leverage to control a larger position than your actual balance
Q Is this legal in the US
A The filing is specifically to make it legal and compliant By registering with the CFTC Kraken is aiming to offer these products to US residents in a regulated environment as opposed to the offshore unregulated platforms many traders currently use
Q Who is the CFTC and why do they matter
A The CFTC is the US government agency that regulates derivatives markets Having them oversee the product means there are rules for transparency market manipulation prevention and customer protection
Regulatory Compliance Questions
Q Why is this a big deal Many exchanges already offer perpetuals
A Most perpetual exchanges are blocked for US customers because they arent registered with US regulators This filing would create a compliant way for US traders to access these products which is a significant expansion of the domestic crypto market
Q Is Kraken getting a license to do this