The European Securities and Markets Authority (ESMA) issued a public statement on Tuesday asserting that derivatives marketed as ‘perpetual futures’ or ‘perpetual contracts’ are likely to be classified as Contracts for Differences (CFDs) under existing national product intervention measures.
The move effectively closes off another revenue avenue for crypto, trading, and investment platforms that may have planned on using perpetuals to offer a high leverage product to clients.
What ESMA said
ESMA’s statement is addressed to firms and National Competent Authorities (NCAs) across the EU. Its core message is that the commercial name a firm gives a product is irrelevant for the purposes of MiFID II categorisation.
“The commercial name provided by firms (e.g. ‘perpetual futures’) is irrelevant for the categorisation under MiFID II of products distributed, marketed or offered to clients,” ESMA said.
The regulator said that any derivative providing leveraged exposure to an underlying value that is not exclusively settled physically would likely fall within the scope of CFD product intervention measures. Features such as being traded on a venue, using a funding rate mechanism, or voluntarily offering negative balance protection do not change this assessment.
What it triggers
If a product is classified as a CFD, it becomes subject to the retail investor protections first introduced by ESMA in 2018 and subsequently adopted as permanent national measures across the EU.
For crypto-underlying CFDs, that means a 2:1 leverage cap on retail positions. Firms offering 50x or 100x leverage on Bitcoin or Ethereum perpetuals to EU retail clients will struggle to maintain those products in their current form as a result.
Beyond leverage, the measures impose mandatory negative balance protection, standardised margin close-out rules at 50% of minimum required margin, a ban on monetary and non-monetary incentives such as deposit bonuses and trading rebates, and standardised risk warnings disclosing the percentage of retail accounts that lose money.
Firms must also conduct appropriateness assessments and define a narrow target market for these products, which limits mass-marketing tactics and broad retail distribution. The PRIIPs Regulation requires preparation of a Key Information Document (KID) for retail clients on top of all this.
Perpetual futures have become the dominant derivative in crypto markets. Total perpetual volume across all venues reached approximately $9 trillion in October 2025, nearly triple spot market volume, according to industry data.
Who is already adjusting
Crypto exchange Kraken announced in February that its new perpetual futures for tokenised stocks and ETFs would not be available to EU users at launch.
Blockchain technology firm Consensys’s Senior Counsel Bill Hughes said firms need to act quickly. “Regulators will step in and take over the entire process if firms don’t sit down, review their products… and clean up their internal systems,” he said.
The UK’s Financial Conduct Authority (FCA) maintains a stricter stance, with an outright ban on the sale of crypto derivatives to retail investors in place since 2021. The FCA is consulting on a broader crypto regime under CP26/4, expected to go live in October 2027, but has given no indication of repealing the retail derivative ban.
ESMA’s statement gives NCAs across the EU a clearer basis to challenge firms distributing perps without applying CFD safeguards. It is plausible that more venues will follow Kraken’s approach, geo-fencing EU retail users out of perpetual products or funnelling them through professional client onboarding. Crypto-linked leveraged products are being pulled firmly into the post-2018 EU retail CFD regime, and the product shelf for EU retail clients is getting narrower.
