What bringing perps onshore actually fixed

The CFTC approved the first onshore crypto perpetual futures last month. Kalshi went live with a regulated Bitcoin perp on 3 June, and within days Terry Duffy, who runs the largest derivatives exchange in the world, called the whole category a disaster waiting to happen.

His worry was specific: high leverage, automatic liquidation, and a funding cost that retail traders do not always understand they are paying to hold the position.

An offshore perp let you run up to 50x. That means posting around 2% of the position as collateral, and a 2% move against you wipes it out. Kalshi’s regulated Bitcoin perp caps leverage at 5.7x, so you are posting closer to 17.5%. CME’s listed Bitcoin future has even greater requirements, currently at 50% of notional, roughly 2x. For context, a vanilla index or treasury future sits somewhere around 3 to 12%.

The regulated crypto products are not at the thin end of that range. They are heavier than almost anything else on a regulated exchange.

So credit where it is due. Bringing perps onshore raised the collateral, capped the leverage, put real disclosure and KYC around them. Every one of those is a genuine improvement on an offshore venue with none of them, and it answers most of the part of Duffy’s worry that is about leverage.

But collateral is a buffer, not the product. It changes how far the price has to move before there is a problem. It does not change what happens when the price moves that far.

It does not cover the other issues Duffy raises, that funding rates are essentially a tax on retail traders. They are gameable and they lack transparency. This is the same issue that stopped institutional traction when perpetual futures (CMF) launched on Eurex in 2015. The funding rate could be gamed, the institutions understood that, and they did not use them.

The worry is that this is a step backwards in understanding: it adds risk without resolving the issue, which is what Duffy is pointing at.

What it actually shows is retail demand for better market access to leverage, not for instruments that are structurally set up to create retail losses.

Better margin than offshore is good, and it reduces the scope for scams. But the product is still not a winner for the people using it.

This first appeared on LinkedIn on 10 June 2026. If you want to comment or discuss, that’s the place.