The U.S. SEC has officially intervened in a regulatory dispute over whether its sister agency should approve sustainability contracts for individual stocks. This interagency policy disagreement reflects the U.S. financial regulatory system’s growing concern about the cryptocurrency derivatives market.
Perpetual contracts are leveraged futures instruments with no expiration date that have traditionally been used primarily for trading cryptocurrency assets. As trading platforms have begun offering perpetual contracts for individual stocks, U.S. regulators have become divided over the division of jurisdiction and investor protection standards. The SEC’s move indicates that the development of a regulatory framework and consumer protection measures for new derivative products has been placed high on the regulatory agenda.
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