CME CEO: US Perpetual Futures Approval Could Bring Tax Uncertainty
2026-07-30 14:36
Odaily Planet Daily News: CME Group Chairman and CEO Terry Duffy stated that the approval of perpetual futures contracts in the United States could expose traders to tax and regulatory uncertainties, as the products may ultimately be classified as swaps rather than futures.
Duffy explained that buyers and sellers in perpetual contracts periodically exchange funding rates, a mechanism that aligns with the legal definition of a swap under U.S. law. The Commodity Futures Trading Commission (CFTC) currently categorizes them as futures, and CME is challenging this classification in court.
Duffy noted that if perpetual contracts are treated as futures, some institutional traders may qualify for the mixed tax treatment under Section 1256 of the U.S. tax code. If classified as swaps, they may be taxed under ordinary tax rules. The Internal Revenue Service (IRS) has not yet issued specific guidance on the tax treatment of perpetual futures.
Legal experts said that perpetual futures are structurally similar to swaps but serve an economic function akin to futures, making the court’s interpretation of the relevant definitions crucial. Even if the litigation clarifies product classification, the IRS may still need to issue separate tax treatment guidance.
Duffy explained that buyers and sellers in perpetual contracts periodically exchange funding rates, a mechanism that aligns with the legal definition of a swap under U.S. law. The Commodity Futures Trading Commission (CFTC) currently categorizes them as futures, and CME is challenging this classification in court.
Duffy noted that if perpetual contracts are treated as futures, some institutional traders may qualify for the mixed tax treatment under Section 1256 of the U.S. tax code. If classified as swaps, they may be taxed under ordinary tax rules. The Internal Revenue Service (IRS) has not yet issued specific guidance on the tax treatment of perpetual futures.
Legal experts said that perpetual futures are structurally similar to swaps but serve an economic function akin to futures, making the court’s interpretation of the relevant definitions crucial. Even if the litigation clarifies product classification, the IRS may still need to issue separate tax treatment guidance.
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