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CME Group CEO Terry Duffy publicly warned that newly approved US-regulated perpetual futures contracts are "a disaster waiting to happen," comparing the current environment to the buildup ahead of the 2008 financial crisis and saying excessive leverage could wipe out retail traders who do not understand the product.
Duffy made the remarks at Piper Sandler's Global Exchange & Fintech conference on Thursday, June 4, and also appeared on CNBC's Fast Money on Wednesday to raise similar concerns. "I really believe it's 2007," he said. "The housing market has been supplanted by the speculation market, including predictions and everything else, and this could be a disaster waiting to happen." Bloomberg reported separately that Duffy told the Piper Sandler audience he has "grave concerns" with how the contracts are structured.
Duffy's central objection is leverage and retail exposure. Perpetual futures traded on offshore venues, where the bulk of global crypto derivatives volume sits, can carry leverage of 20x to as high as 250x, far above CME's roughly 5x margin framework on its regulated crypto products.
