ESMA Places Perpetual Futures Inside the CFD Perimeter: 2:1 Leverage for Retail Clients in the EU

Whether you, as a retail client in Germany, may trade perpetual futures with two times leverage or with fifty times leverage hangs on a question of classification in European supervisory law. It runs as follows: are these contracts contracts for difference within the meaning of the existing EU measures? If they are, a leverage cap of 2:1 applies to retail clients. On February 24, 2026, the European Securities and Markets Authority, ESMA, stated in a public notice that derivatives marketed as “perpetual futures” or “perpetual contracts” are likely to fall within that scope. On September 30, 2026, the final day of the consultation period for the review of the MiCA regulation, the Hyperliquid Policy Center filed a submission with the European Commission that asks for exactly this classification to be settled differently.

For you, more rides on this than a question of terminology. The classification determines what leverage a provider may offer you at all, whether your losses are capped at the balance you have paid in, at what point a position is closed out, and which venues are allowed to take you on as a client in the EU.

What the Hyperliquid Policy Center filed with the European Commission on September 30

The Hyperliquid Policy Center, or HPC, is an advocacy body from the orbit of the decentralised trading platform Hyperliquid. The submission of September 30, 2026 is, by the organisation's own account, its first statement on a rulebook outside the United States. It is addressed to the European Commission, which had been gathering responses through its targeted consultation on the MiCA review since May 20, 2026.

At the heart of the submission is a shift of competence. The HPC asks the Commission to confirm, building on ESMA's existing guidance, that perpetual futures fall under the financial markets directive MiFID II, irrespective of the system in which they are recorded and of the underlying to which they refer. MiFID II is the European rulebook for investment firms, trading venues and financial instruments, derivatives among them. The organisation stresses explicitly that no new legislation is needed for this, and that a clarification would suffice.

The load-bearing argument is an economic one. In the HPC's view, supervisory classification should depend on the structure and the economic characteristics of a product and not on the technology used to record it. Jake Chervinsky, who heads the HPC, condensed that thought in the submission into the proposition that an instrument's economic properties, and not the ledger in which it is recorded, ought to decide its classification.

ESMA notice of February 24, 2026: perpetual futures inside the CFD perimeter

The supervisor itself provided the occasion for the submission. A perpetual future is a derivative on an underlying which, unlike a classic future, has no expiry date and stays tied to the spot price through a recurring settlement payment. On February 24, 2026, ESMA published a public notice on the question of which derivatives fall within the scope of the national product intervention measures for contracts for difference.

The authority's message is clear on three points. First, the product name is immaterial: the fact that a contract is marketed as a “perpetual” says nothing about its legal classification. Second, neither the funding rate mechanism nor voluntary safeguards such as an insurance fund change anything about that assessment. Third, firms have to evaluate these products under MiFID II and under investor protection rules. On this reading, what is caught above all are contracts that provide leveraged exposure to crypto assets such as Bitcoin and are not settled exclusively by physical delivery.

A product intervention measure is a supervisory step by which an authority restricts or prohibits the distribution of a financial product to particular client groups. For contracts for difference, that step has existed in the EU since 2018, and it still takes effect today through the national measures of the member states.

The CFD rules in detail: 2:1 leverage, margin close-out and negative balance protection

What the CFD framework means for retail clients can be put in figures. ESMA adopted its measures for contracts for difference with effect from August 1, 2018 and set out tiered leverage limits in them: 30:1 for major currency pairs, 20:1 for other currency pairs, gold and major equity indices, 10:1 for other commodities and non-major equity indices, 5:1 for individual equities and other underlyings, and 2:1 for cryptocurrencies. The bottom tier is therefore precisely the one that covers crypto assets.

Four further requirements come on top. The measures prescribe a per-account margin close-out that harmonises the percentage at which a provider must close open positions; it sits at 50 percent of the required minimum margin. They require per-account negative balance protection, which caps a retail client's losses in total. They restrict incentives for trading contracts for difference. And they mandate a standardised risk warning that states the share of the provider's loss-making retail client accounts.

For a trader working with high leverage today, the gap between 2:1 and the figures common on large platforms is the real issue. The leverage cap determines how much capital you have to post for a position, and therefore also how far the price may travel before the forced close-out bites. If you want to know how the running costs of such a position break down, you will find the arithmetic in our guide to calculating the funding rate.

MiFID II instead of MiCA: the submission turns on structure and economic characteristics

MiCA governs the market for crypto assets in the EU, but it captures above all the crypto assets themselves along with the services around them. Derivatives on crypto assets are financial instruments and therefore belong to the world of MiFID II. That dividing line is exactly what the submission aims at: it wants the classification of perpetual futures determined through the existing derivatives framework rather than primarily through MiCA.

The practical difference lies in the catalogue of obligations. A trading venue under MiFID II needs a different authorisation, different organisational duties and different transparency duties from a crypto asset service provider under MiCA.

Counterparty risk: a perp venue is not itself the other side, according to the submission

The HPC does not dispute that perpetual futures are derivatives. What it disputes is that the restrictions dating from 2018 fit them unchanged. The reasoning starts from structure: with a contract for difference the provider itself acts as the client's counterparty, whereas on a venue for perpetual futures, as the organisation presents it, another market participant stands on the other side and not the platform itself. From that distinction the HPC concludes that the two products carry different structures and different risks, and that the measures should therefore not be transposed without adjustment.

The argument is not immaterial for investor protection. Where the provider is the other side, it has an interest of its own in the client's loss, and that very conflict of interest was one driver of the 2018 measures. If it falls away, the burden of justification shifts. Whether the Commission will follow that view is open. In assessing an individual provider, what counts in the end is how the contractual relationship is actually set up.

Funding rate, maintenance margin and liquidation threshold: what the submission wants published in advance

Alongside the classification, the HPC proposes concrete transparency duties. On this model, trading venues would publish their methodology for calculating the funding rate, their maintenance margins and their liquidation thresholds in advance. The funding rate is the periodic payment between the buy and sell side that ties the price of a perpetual future to the spot price. The maintenance margin is the minimum capital that has to cover an open position. The liquidation threshold is the point at which the platform unwinds a position by force.

A reporting proposal comes with it. In the organisation's view, publicly verifiable funding payments, liquidations and transaction activity could be taken into account by supervisors as features of market structure. The submission invites the Commission to examine whether such records can satisfy part of the reporting duties, provided the information is complete, reliable and accessible to supervisors.

These three figures matter to you even while the classification remains open. They determine what a position costs on an ongoing basis and when it is closed. How widely the terms differ between platforms is shown by a look at our comparison of perp DEX.

What the initiative means for investors in Germany

In the short term the submission changes nothing about your legal position. It is a statement in a consultation procedure, not a rule. What is in force today is ESMA's February notice: firms have to assess whether their products fall within the scope of the CFD measures, and where they do, the requirements apply, leverage cap of 2:1 for retail clients included.

In the medium term the question is which route lets you take leveraged crypto positions legally. If the supervisory line prevails, the offering for retail clients in the EU narrows to providers that meet the requirements. If the Commission follows the HPC's reasoning, a dedicated framework for perpetual futures could emerge, with transparency duties in place of a hard leverage cap. Both are documented possibilities, and neither is a forecast.

Why a leverage cap does not look like a block

A product intervention measure is addressed to the provider, not to you. It therefore rarely shows up as an error message in the trading window. It appears instead as a changed account classification, as fresh questions about your knowledge and experience, or as a provider that stops accepting clients from the European Economic Area altogether. Anyone who holds positions for months often notices such a change only at the next deposit.

Buying route and authorisation: how to check whether your perp platform is licensed in the EU

The check runs through the provider, not through the product. Look in the terms of use to see which company is your contractual partner and in which state it is based. Then establish whether that company holds an authorisation as an investment firm or as a crypto asset service provider in the EU, and whether clients from Germany are expressly admitted. Finally, see whether the provider displays a standardised risk warning stating the share of loss-making retail client accounts, because that warning is a hallmark of the CFD framework. Which regulated houses carry leveraged products for German clients is set out in our broker comparison.

Tax: perpetual futures count as forward transactions, and the holding period does not apply here

The tax treatment follows the legal classification, and that is the uncomfortable part for you. The one-year holding period, which applies to direct purchases of coins through the rules on private disposals, does not apply to a derivative on a coin. Gains from forward transactions fall into investment income, and there is no period there after which a gain remains tax free.

Because the classification of individual products can be contested, and because platforms without an EU authorisation issue no tax certificate, this point belongs before your first trade and not in next year's tax return. Discuss the treatment of your positions with a tax adviser. For gathering records across the year, the tools from our comparison of crypto tax tools help, since they can extract funding payments and liquidations from the trading data.

Circle and the reserve rule: the second strand of the same consultation

The perpetuals submission is not the only one that arrived in the final days of the deadline. The stablecoin issuer Circle has, by its own account, called on the European Commission to retain multi-issuance of stablecoins, to recognise stablecoins regulated abroad, and to relax the duty to hold a share of reserves as deposits with commercial banks. Circle refers in this context to a share of 30 percent and justifies the demand with the counterparty risk that arises from such bank deposits.

Both submissions display the same pattern. What is attacked are individual points in the rulebook where, as the industry presents it, the rules meet structures they were not written for. Neither submission calls MiCA as a whole into question. For you as an investor the common denominator is availability: which stablecoins stay tradable in the EU, and what leverage you are allowed to trade with, are both outcomes of this detailed work.

The European Commission's report: what follows the September 30 deadline

The targeted consultation on the MiCA review ran from May 20, 2026 and ended on September 30, 2026. The original version of the documents named August 31 as the date; the Commission later extended the deadline on its own page to September 30. Thematically the survey covered, among other things, the scope and the definitions of the regulation, the rules for stablecoins, crypto asset service providers, decentralised finance applications, staking, NFTs and the legal treatment of individual tokens.

The Commission does not name a date for a legislative proposal in the public consultation documents. Months usually pass between the close of such a survey and a proposal. Until then, ESMA's February notice remains the yardstick that providers have to align with, and therefore the yardstick for your account too.

What you can read from the two dates

February 24, 2026 is the date from which firms had to assess. September 30, 2026 is the date from which the Commission is assessing. Between the two lies the phase in which providers adjusted, restricted or discontinued their offerings for European retail clients. If something about your account changed in that period, this is the likely reason.

Perpetual Futures and MiFID II: What to take away

1. Establish who your contractual partner is and whether it is authorised in the EU. The leverage cap takes effect through the provider's authorisation. Our broker comparison shows which regulated houses carry leveraged products for German clients.
2. Read up on your platform's funding methodology, maintenance margin and liquidation threshold before you open a position. Those are precisely the three figures the submission wants published in advance as a matter of obligation. The differences between platforms are set out in the perp DEX comparison.
3. Set your record keeping up for forward transactions, not for the one-year holding period. Which tools extract funding payments and liquidations from the trading data is set out in the comparison of crypto tax tools.

(As of October 2, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)