Ondo, SEC, CFTC: The Perpetual Push for Onshore Crypto Derivatives

Ondo Finance is urging US regulators to greenlight onshore perpetual futures for stocks, arguing they fit existing frameworks. This move intensifies the broader debate with the SEC and CFTC on how crypto derivatives will be regulated in the US.

New York, NY – Ondo Finance is making waves, pushing for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to allow onshore perpetual futures tied to individual stocks. This isn't just a technical ask; it's a strategic move that could reshape the landscape of crypto derivatives in the U.S., placing Ondo squarely in the middle of a high-stakes regulatory debate.

Ondo's Bold Claim: Perpetuals Already Fit the Bill

Ondo Finance, in recent comment letters to both the SEC and CFTC, laid out its argument: perpetual contracts, despite their seemingly novel structure, are already covered by existing security futures frameworks. They believe new rulemaking isn't necessary. It's a pretty savvy move, suggesting that the spirit of the law, if not every letter, is on their side. They're pointing to their offshore operations, which have already racked up a hefty $8 billion in trading volume for stablecoin-settled perpetual stock futures in just six weeks. Talk about putting your money where your mouth is.

Their core contention is that a fixed expiration date isn't a prerequisite for a product to be classified as a security future. Ondo argues that scheduled funding payments in perpetual contracts effectively do the same job as expiration in traditional futures, keeping the contract price aligned with the underlying stock. This modern take on market mechanics also emphasizes the need for regulators to consider contemporary margining approaches and onchain market data—elements that are standard in blockchain-based derivatives but might not have been on the radar when older rules were drafted.

Why Onshoring Matters: Bringing Crypto Home

Ondo's push isn't just about offering new products; it's about bringing a significant chunk of financial activity back to U.S. soil. As they rightly point out, many of the underlying stocks in these perpetual futures are primarily traded on U.S. exchanges. When these derivatives migrate offshore, it creates a blind spot for U.S. oversight, making liquidity and price discovery harder to monitor. By advocating for onshore operations, Ondo is essentially arguing that regulators can embrace and supervise this activity, rather than letting it flourish unregulated beyond the country's borders. It’s a win-win, theoretically, offering both innovation and regulatory clarity.

The Broader Regulatory Dance: SEC, CFTC, and Crypto's Future

Ondo's proposal comes at a crucial time. The SEC and CFTC are actively re-evaluating how existing market frameworks apply to blockchain-native products, including perpetual futures and tokenized securities. There's a clear effort to harmonize overlapping jurisdictions, as evidenced by their March memorandum of understanding. Even political figures are weighing in, with former President Trump reportedly discussing bringing onchain derivative venues like Hyperliquid into the U.S. in a compliant manner. This signals that Washington is paying close attention to crypto market structure, making Ondo's timing particularly astute.

This ongoing regulatory reassessment isn't limited to derivatives. The SEC is also updating its transfer agent framework to reflect the growing demand for blockchain-native recordkeeping and tokenized securities. It’s a clear acknowledgment that legacy infrastructure rules simply don't cut it for modern, token-based markets. Meanwhile, the CFTC is embroiled in its own skirmish, fighting to dismiss CME’s lawsuit over Kalshi’s Bitcoin perpetual futures. This clash is a direct test of who gets to police crypto derivatives in the U.S. and highlights the intense competition and regulatory uncertainty in this space.

Ondo's Vision: Tokenized Real-World Assets and Beyond

Ondo's focus on derivatives aligns perfectly with its broader strategy in the tokenized real-world assets (RWA) space. They're a significant player, ranking fourth among tokenized RWA managers by distributed value. A clear regulatory path for perpetual stock futures could significantly boost the use cases for tokenized assets, especially if it allows U.S. market participants to hedge or express views on familiar instruments with clearer oversight. It’s all about building out a robust, interconnected financial ecosystem.

However, questions remain. How will regulators view the specific mechanics of perpetual contracts, particularly funding, margining, and mapping onchain data flows to existing surveillance and compliance expectations? Ondo has made a compelling legal and structural case, but the real test will be how the SEC and CFTC respond. Will they deem Ondo's position sufficient under current rules, or will they demand additional guidance to define acceptable perpetual contract structures?

For those of us watching this space, the next move from the SEC and CFTC will be the real tell. It's a fascinating time in finance, where innovation meets regulation, and the outcome could shape how we trade and invest for years to come. So grab your popcorn, folks, because this regulatory drama is just getting started!