00:00You have been a lawyer in the crypto industry since 2017. So you understand this lawsuit from a legal perspective
00:05as well as an industry perspective.
00:07Can you help us make sense of it from where you sit. What is the regulatory regime supposed to look
00:12like that CME argues the CFTC circumvented.
00:15Yes. So from my perspective this lawsuit is all about business.
00:22Globally perpetuals are the number one method for trading crypto. And so if you look at CoinGecko in 2025 there
00:32were 87 trillion traded in volume in crypto perpetuals whereas there's almost no activity in futures or other options because
00:42perpetuals are the number one method for crypto trading globally.
00:46And so CME probably sees this and feels threatened. Right. When the CFTC on May 29 announced its order granting
00:55Calci its Bitcoin perpetual and then issued its policy statement saying like you know regulation 40.3 is a way
01:02to get approval for new perpetuals.
01:05I'm sure CME felt oh perpetuals are coming to the U.S. true perpetuals not just perpetual style futures and
01:12they felt very threatened that this could impede on their growing repertoire of Bitcoin Ether XRP futures and options.
01:21Is it fair to say that Dragonfly's portfolio companies would benefit from onshore perpetual futures.
01:26So we could we could fairly say that. Right. Yeah. So we have a few perplexes in our portfolio decentralized
01:33exchanges like variational lighter hello trade.
01:36And I think from their perspective they currently don't serve any U.S. customers but they you know eventually would
01:44like to onboard U.S. customers.
01:45And they see this as step one. The CFTC's actions as step one of eventually being able to come on
01:53shore.
01:54So aside from the what you see in your portfolio companies or what those portfolio companies see the CFTC did
02:00approve Calci's BTC perp through a one day self certification process that
02:06CME calls a quote novel and complex product. Even if you think CME's motives are self interested. Do you think
02:12there's a legitimate concern that the CFTC did move too fast.
02:16Yeah. You know I think the CFTC has discretion in how it wants to categorize novel products.
02:22I think when Dodd-Frank was passed you know perpetuals didn't exist.
02:26And so it was it's very hard to say that like the Dodd-Frank meant for perpetuals to be a
02:32swap.
02:33And so I think this CFTC saw that perpetuals had the style of a future as like standardized contracts.
02:40It has centralized clearing. It has you know mark to market compensation.
02:45And so it saw that it trades it acts like a perpetual and it has the risks of a perpetual.
02:50And so it's decides to treat it in the future's regime. It has the characteristics of a future.
02:57And so it decides to trade it in a future's regime which makes no sense for the rest that it
03:02poses.
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