DRW CEO Don Wilson used a series of posts on X to argue that regulators misread perpetual futures, which he described as futures contracts without an expiration date. The high leverage and forced position cuts that draw scrutiny, he said, come from how individual crypto exchanges built the products. He urged supervisors to judge perps by economic substance rather than legal labels.
DRW CEO Don Wilson told regulators they are aiming at the wrong target. In a series of posts on X, he argued that perpetual futures are simply futures contracts without an expiration date. The features usually associated with them — high leverage, auto-deleveraging and around-the-clock trading — describe how some crypto exchanges chose to implement the products, not the contracts themselves.
Exchange plumbing, not contract design
Perpetual futures have become one of crypto’s defining financial products. Crypto exchanges such as Hyperliquid, unlike traditional futures venues, operate continuously, use digital collateral and can calculate margin requirements in real time, which allowed them to offer higher leverage and alternative liquidation mechanisms.
One of those mechanisms, auto-deleveraging, automatically reduces winning positions when losing traders cannot cover their losses. Wilson wrote that he is not a fan of ADL and that there is no reason it needs to be used for perps. Crypto Briefing reported that the high leverage behind the controversy is a parameter set by exchanges such as Binance or Bybit.
Real-time settlement shrinks the margin buffer
Wilson argued that digital payment rails instead create room to improve risk management. Traditional clearinghouses generally calculate margin once a day, with market participants often having until the following business day to post additional collateral, so relatively large initial margin buffers cover moves inside that window.
But with real-time settlement, he said, exchanges can recalculate margin continuously and require traders to post collateral immediately, reducing the need for large upfront margin while maintaining the same level of protection. Whether exchanges turn those efficiencies into higher leverage is a business decision, not a defining feature of perpetual futures.
The push to take perps beyond crypto
Wilson said the real innovation is that perps eliminate the need for investors to repeatedly roll expiring contracts, reducing transaction costs, market impact and roll slippage while allowing positions to more closely track the front of the futures curve. He also urged regulators to focus on economic substance rather than legal labels. According to CoinDesk, Wilson rejected the swaps label: “There’s no reason to treat perpetuals as swaps simply because they don’t expire.”
His comments land as interest in bringing perpetual futures into regulated U.S. markets continues to grow, with questions remaining over whether the products fit existing futures or swaps frameworks. Kalshi recently submitted a proposal with regulators to expand its offerings to precious metals.
Wilson is not arguing from the sidelines: DRW is one of the largest proprietary trading firms in the world, and he has a lengthy history with U.S. regulators, including past legal disputes with the CFTC. He closed by calling for perpetual futures across commodities, securities and crypto, as another tool for price discovery and risk management rather than a crypto-specific innovation.
Sources: CoinDesk, Crypto Briefing
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