Terry Duffy (테리 더피), chief executive of CME Group, the operator of the largest derivatives exchange in the United States, voiced strong concern about U.S. regulators approving crypto perpetual futures. He warned the products could pose excessive risks to retail investors and could negatively affect financial market stability.

On June 5 local time, blockchain media outlet Cryptopolitan reported that Duffy called U.S. approval of crypto perpetual futures trading "an accident waiting to happen" in an interview the previous day.

At the centre of the controversy is a recent decision by the U.S. Commodity Futures Trading Commission. The CFTC on May 29 approved applications by crypto exchange Coinbase and prediction market platform Kalshi for U.S.-regulated crypto perpetual futures products.

Perpetual futures are derivatives with no expiry date, unlike standard futures contracts. Investors can hold the contracts as long as they want, and they are already actively traded in the crypto market, mainly on global exchanges.

The issue is the high-leverage structure. Perpetual futures typically offer leverage of up to 50 times. In that case, a 2 percent move against a position can liquidate the entire investment.

Duffy said he was particularly concerned that retail investors may not fully understand those risks. "Normal market function is being replaced by a speculation-driven market," he said. "This helps no one," he added.

He also said that sharp price moves could force investors out of the market in ways they do not want through automatic liquidation systems. He said many retail investors do not properly understand how funding fees affect long-term returns.

Duffy also criticised the approval process. He argued that although the CFTC defined perpetual futures as a new form of complex financial product, it rushed the review process too much. He warned that retail investors could suffer large losses if they participate without sufficient understanding.

Markets reacted immediately. After approval of U.S.-regulated crypto perpetual futures, shares linked to major derivatives exchanges weakened. Cboe Global Markets fell about 9 percent on June 2, while CME Group and Intercontinental Exchange, parent of the New York Stock Exchange, each fell about 4 percent.

Investors are worried that if perpetual futures expand beyond crypto into other asset classes such as stocks and commodities, they could directly compete with existing derivatives markets. Bill Katz, an analyst at TD Cowen, said the key variable was how quickly perpetual futures might be approved in stock and commodities markets.

Some on Wall Street see limited impact. Patrick O'Shaughnessy at Raymond James said perpetual futures are essentially speculative products geared toward retail investors. He said they would be unlikely to replace traditional futures markets used mainly by institutions because the investor base is different.

Ashish Sabadra at RBC also said that because perpetual futures and traditional futures differ in product structure, the risk of competition is at a manageable level. Duffy also said it was unlikely that CME's business itself would face a direct threat. He said 85 to 90 percent of CME trading volume comes from institutional investors, who have little incentive to actively use perpetual futures contracts.

The CFTC plans to conduct asset-by-asset reviews for future perpetual futures products. If perpetual futures expand into other asset classes beyond crypto, such as agricultural products, precious metals and stocks, it has been suggested that stricter review standards could be applied.

As the market assesses the approval as a potential new turning point for the U.S. crypto derivatives market, debate is also expected to grow over how to balance retail investor protection and financial innovation.