CME CEO Warns of Unresolved Tax Risk for Perpetual Futures
Terry Duffy says a court case could determine how the IRS treats perpetual futures contracts.
CME Group CEO Terry Duffy has flagged a potential tax risk for perpetual futures, warning that a legal battle over their classification could trigger IRS scrutiny. Duffy noted that whether perpetuals are deemed swaps or futures may ultimately affect how they are taxed.
Speaking at an industry event, Duffy highlighted that the issue remains unresolved despite the product's growing popularity. Independent legal experts consulted by CoinDesk confirmed that there is no clear precedent, leaving the market exposed to future tax liabilities.
The Classification Debate
Perpetual futures are derivative contracts that allow traders to speculate on asset prices without an expiration date. In the U.S., their legal status as either swaps (regulated by the CFTC) or futures (taxed differently) has been contested in court. A ruling could set a precedent for IRS treatment.