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DRW CEO says regulators misjudge perpetual futures risk
Don Wilson argues the contract itself has no expiration, while exchange design choices like leverage and ADL drive perceived risks.
Perpetual futures, or “perps,” have become a defining crypto product, but DRW CEO Don Wilson said much of the industry’s risk narrative about them is based on misunderstandings. In posts on X, Wilson said perps are simply futures contracts without an expiration date, and that commonly cited features such as high leverage, auto-deleveraging, and around-the-clock trading come from how some crypto exchanges implement the products, not from the contract structure itself.
Wilson said interest in bringing perpetual futures into regulated U.S. markets is growing, with some exchanges and participants exploring launches beyond crypto. He noted that questions remain about how these products should be regulated and whether they fit within existing futures or swaps frameworks.
He contrasted crypto exchange mechanics with traditional clearing, arguing that continuous operation and real-time margin calculation change the risk-management picture. Wilson pointed to examples where crypto platforms can calculate margin continuously and require collateral promptly, whereas traditional clearinghouses typically calculate margin once per day and allow participants until the next business day to add collateral, forcing larger initial margin buffers.
Wilson also said decisions about whether to offer higher leverage are driven by business choices rather than inherent characteristics of perpetual futures. He described digital payment rails and real-time settlement as potential opportunities to improve risk management, rather than proof that perps are inherently riskier contracts.