Law of Code #150 - Masterclass on Crypto 'Perps' with Katherine Kirkpatrick Bos
Jul 21, 2025
Katherine Kirkpatrick Bos, a derivatives legal expert and general counsel at StarkWare, dives into the world of perpetual futures or 'perps'. She explains how these derivatives, which never expire, have largely been traded offshore due to regulatory uncertainties. Katherine discusses the recent shift to CFTC-regulated onshore contracts, highlighting benefits like improved trader protections and better price discovery. She also explores the future of crypto derivatives regulation and what this means for market dynamics and U.S. traders.
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Perps Are Expiry-Free Cash-Settled Derivatives
- Perpetual futures (perps) are derivatives without expiry that provide continuous price exposure.
- They enable cash-settled trading where no underlying asset changes hands, boosting operational simplicity.
Enforcement Pushed Perps Offshore
- Perps often moved offshore because the CFTC alleged some offshore perps were swaps requiring DCM or SEF registration.
- That enforcement posture effectively pushed many trading venues and volume outside the U.S.
Crypto Fits Perps Better Than Hard Commodities
- Crypto is unusually well-suited to perps because no physical delivery is required and settlement is simple.
- That suitability has amplified perps' popularity but also regulators' concerns about leverage and speculation.