Coinbase proposes equity perpetual framework to SEC and CFTC

Coinbase just made its most ambitious regulatory play yet. The exchange submitted a detailed comment letter to both the CFTC and SEC on August 24-25, proposing a classification framework that would allow it to offer equity perpetual derivatives to US traders through its already-registered derivatives arm.

The core argument is elegant in its simplicity: treat equity perpetuals as “security futures” under the Commodity Exchange Act, and the existing regulatory plumbing handles the rest. CFTC-registered designated contract markets, like Coinbase Derivatives, could then offer these products through a streamlined notice registration with the SEC. No new regulatory category needed.

The classification gambit

The letter, signed by Coinbase’s Scott Bauguess and Julia Hueckel, responds to a joint CFTC-SEC Request for Comment on how to properly define “swap” and “security-based swap.” These definitions might sound like bureaucratic trivia, but they determine which regulator has jurisdiction over which product, and therefore which venues can legally list them.

Coinbase’s proposed answer cuts through years of jurisdictional ambiguity. By fitting equity perpetuals into the existing “security futures” box, the framework creates a two-way street. CFTC-registered contract markets could list these products via notice registration with the SEC. National securities exchanges could do the reverse, registering with the CFTC. Both regulators maintain oversight, and neither has to invent new rules from scratch.

Perpetual contracts are derivatives that let traders take leveraged positions on an asset’s price without an expiration date. They’ve been wildly popular in offshore crypto markets for years, particularly on platforms like Binance and Bybit.

Coinbase’s ‘Everything Exchange’ strategy

This filing is a piece of what Coinbase has been calling its “Everything Exchange” initiative, a strategic push to transform the company from a spot crypto trading venue into a comprehensive financial products platform.

Coinbase Derivatives has already been laying the groundwork. The exchange launched perpetual-style equity index futures earlier in 2026, including products tied to baskets labeled AI10 and Defense10. These thematic index products give traders exposure to baskets of stocks organized around investment narratives, artificial intelligence and defense sector companies, respectively, using perpetual-style contract structures.

Why the jurisdictional question matters

The US derivatives market has been stuck in a peculiar bind when it comes to perpetual contracts. Without clarity on whether an equity perpetual is a swap, a security-based swap, or a futures contract, most US-regulated platforms have simply avoided the category entirely.

That regulatory vacuum hasn’t killed demand. It’s just pushed it offshore, to venues operating outside US oversight. Coinbase’s letter explicitly addresses this dynamic, arguing that the current jurisdictional disarray detracts from liquidity and hampers innovation domestically.

The argument appeals to both regulators’ institutional interests. The CFTC gets to maintain primary oversight of the futures classification. The SEC gets notice registration rights and joint supervisory authority. Neither agency cedes territory, but both gain visibility into a product category that’s currently trading beyond their reach.

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