Tight US Regulations Could Drive $90 Trillion Offshore

The US regulatory bodies are working on new rules for crypto derivatives, including perpetual futures. The CFTC and SEC are attempting to bring the market onshore by regulating it tightly, but some warn that this could drive liquidity offshore instead.

Kalshi estimates that there is $90T in offshore volume of crypto derivatives, which would exceed $90 trillion by 2025. In contrast, US-regulated crypto derivatives have a volume less than $5 trillion during the same period.

Regulators warn that if they require too many regulations such as registration, margin setting, and surveillance, it could drive liquidity offshore and harm the domestic market.