Are Perpetuals Swaps or Futures? The CME Picks a Fight

Summary

The podcast discusses the CME's lawsuit against the CFTC over whether Bitcoin perpetual futures are swaps or futures, which would affect margin requirements. Chris Perkins explains the Dodd-Frank history and policy errors, while Austin Campbell warns that the lawsuit could backfire on CME and disrupt established markets. The discussion also touches on competitor moves and the importance of regulatory clarity.

• CME sued the CFTC to reclassify Bitcoin perpetuals as swaps, requiring higher collateral.
• Chris Perkins traces the post-crisis G20 mandate for swaps to centralize, and argues it was a mistake to set margin based on instrument type rather than liquidity.
• If perpetuals are classified as swaps, onshore leverage would be restricted, pushing US retail offshore.
• Austin Campbell cautions that CME's lawsuit risks CFTC retaliation by redefining rolling futures as swaps, or Supreme Court finding Dodd-Frank vague and invalidating swap rules.
• Chris Perkins notes that ICE and other exchanges are partnering with crypto firms, potentially benefiting from CME's defensive position.
• The discussion emphasizes the need for principles-based regulation and how the post-Chevron legal environment raises the stakes.