In a notable development for the cryptocurrency landscape, February 2026 saw major regulatory interventions from both the European Union and the United States, targeting the burgeoning market of crypto derivatives. The European Securities and Markets Authority (ESMA) and the US Commodity Futures Trading Commission (CFTC) have adopted markedly different regulatory strategies concerning leveraged crypto products like perpetual futures. Despite a shared understanding of their growing importance, their methods for ensuring market integrity and protecting investors diverge significantly.
How is Europe Treating Perpetual Contracts?
ESMA’s recent directive, dated February 24, casts a spotlight on perpetual crypto derivatives. Recognizing their rising traction, ESMA urges a focus on the core characteristics of these products rather than superficial branding. This represents a clear move towards a more comprehensive supervisory framework in the EU.
Perpetual contracts are generally governed under the EU’s contract for differences (CFD) laws, which have restricted leverage for retail investors since 2018. With leverage capped at 2:1 and automatic position closures when margins fall to 50%, this policy significantly curtails retail investor leverage within Europe’s regulatory environment.
The regulator has also criticized aggressive marketing strategies, such as unsolicited emails, advocating for a tailored approach to financial product offerings. Mandatory appropriateness checks and clearer information through Key Information Documents (PRIIPs KID) bolster retail investor protection.
What’s the US Approach to These Derivatives?
In contrast, the CFTC has taken a more inclusive stance towards perpetual contracts. The regulator plans to integrate these derivatives into the established regulatory framework using existing oversight mechanisms. CFTC Chairman Michael Selig noted the adaptability of current tools to accommodate these emerging products.
“These products should not be viewed as anomalies but as integral parts of the evolving derivatives market,” Selig commented.
Coinbase’s July 2025 launch of perpetual futures marked a significant US milestone, offering products with up to 5-year maturities and 10x leverage under CFTC’s scrutiny. Cboe also expanded options with long-dated Bitcoin and Ethereum contracts, aligning with established oversight protocols.
Key regulatory differences between the EU and the US revolve around leverage limits and retail participation. EU retail traders are limited to 2:1 leverage, whereas US platforms can offer up to 10x, providing a competitive edge for risk-seeking traders globally.
Bullet points highlight critical insights:
- Global centralized crypto derivative volume reached $85.7 trillion in 2025.
- Binance‘s volume alone contributing $25.09 trillion, comprising 29.3% of activity.
- Perpetual derivatives accounted for 68% of Bitcoin trading volumes.
- Potential shift of 5%-10% global volume to US markets, adding $2.57 trillion to $6.86 trillion annually.
- Transaction fees in the US could see an annual increase of $514 million to $1.37 billion.
The future impact of these regulations will depend heavily on enforcement. In Europe, stricter CFD regulations will extend to a broader range of crypto derivatives. Meanwhile, the US will rely on the CFTC’s infrastructure and rule updates to handle the growing number of regulated perpetual products. Major players like Cboe continue to shape the landscape, underscoring the dynamic nature of this evolving market.
