Coinbase Seeks SEC Approval for 24/7 Equity Perpetual Trading

How Would 24/7 Equity Perpetuals Work for Investors?

Coinbase, the largest U. S.-based cryptocurrency exchange, filed a notice registration form with the Securities and Exchange Commission earlier this week to gain approval for listing equity perpetual contracts that would trade around the clock. The move aims to bring a product popular in international crypto markets to American investors under regulatory oversight. Coinbase Chief Policy Officer Faryar Shirzad confirmed the filing, stating the company is pursuing the initiative to meet growing investor demand for continuous access to equity exposure.

The proposed equity perpetuals would allow traders to hold long or short positions on individual stocks without an expiration date, similar to futures but settled in cash and funded through periodic payments. Unlike traditional stock trading limited to exchange hours, these instruments would operate 24 hours a day, seven days a week, aligning with the non-stop nature of cryptocurrency markets. Shirzad noted that equity perps have demonstrated strong demand outside the U. S., particularly in Asia and Europe, and that Coinbase sees an opportunity to offer a regulated version domestically. The company emphasizes that any listing would comply with SEC rules and investor protection standards, positioning the product as a bridge between traditional finance and digital asset trading.

What Challenges Might Coinbase Face in Gaining SEC Approval?

Equity perpetuals function as derivative contracts where profits or losses are based on the price movement of an underlying stock, with no set expiry date. Traders would post collateral and pay or receive funding rates periodically to keep positions open, mechanism designed to keep the contract price aligned with the stock’s spot value. Coinbase intends to offer these products through its existing trading infrastructure, leveraging its experience with crypto perpetual futures. The exchange says it will implement strict risk controls, including position limits and margin requirements, to mitigate potential volatility and protect retail participants. Shirzad added that investor education will be a key component ahead of any launch, ensuring users understand the mechanics and risks involved.

The SEC has historically scrutinized innovative financial products, especially those blending crypto market structures with traditional securities. Regulators may question whether 24/7 trading could exacerbate market volatility or create unfair advantages for certain traders. Additionally, the agency will likely examine how Coinbase plans to prevent manipulation, ensure transparent pricing, and maintain adequate surveillance across non-traditional hours. While Coinbase points to international precedents, the SEC may require evidence that the product serves a legitimate hedging or investment purpose rather than facilitating excessive speculation. Approval would mark a significant step in integrating crypto-style trading mechanics into regulated U. S. equity markets.

What is an equity perpetual contract? An equity perpetual is a type of derivative that lets traders speculate on a stock’s price movement without owning the share or facing an expiration date, settled in cash with periodic funding payments.

Frequently Asked Questions

Why does Coinbase want to offer these products? Coinbase cites proven demand for equity perpetuals in global markets and aims to provide a regulated, 24/7 access point for U. S. investors seeking continuous equity exposure.

How would 24/7 trading affect traditional stock markets? Coinbase argues the product would operate alongside existing markets, not replace them, and could increase liquidity and price discovery outside regular hours under proper safeguards.