CFTC Approves True Perps and Agentic Finance Gets Real: DEX in the City

**Katherine Kirkpatrick Bos** (0:00)
The laws weren't written for crypto. They weren't written contemplating crypto. I mean, you have the securities laws where a bunch of people who help write those were alive during the Civil War. Problematic, right? Well, it's the same but way worse with agentic commerce, meaning all of our laws were written with the implicit assumption that a human being was taking the action. And now we have this conundrum where the humans are no longer taking action. The agent is taking the action, the agent is the customer.
Hi all and welcome to Dex in the City where the wallets are cold and the takes are hot. Before we get going, remember we're lawyers but we're not your lawyers. Nothing you hear on Dex in the City is legal or financial advice and it doesn't create an attorney-client relationship. For the fine print, check unchainedcrypto.com. Luckily I have the ability to speak very fast in times like this. So first we have Jessi, Web 3 prosecutor turned Web 3 protector at Ribbit Capital.
And I'm your host Katherine, KK fluent in TradFi and conversant in deep tech over at Starkware. V is out today in beautiful Paris at the Proof of Talk conference. Very exciting. Have heard great things about this conference.

**Jessi Brooks** (1:14)
V really knows how to travel. Let me tell you, oh my gosh, she sent us a picture of like the beautiful rain coming down in Paris.
I'm like, what are we doing with our lives? I'm glad it's just us today so that we can rant about everything. I mean, there is so much happening this week. I know you're going to lay out the land here. But to me, the story of this week is finance is officially becoming autonomous and we're finding different ways into that path.

**Katherine Kirkpatrick Bos** (1:46)
Yes, there's so much to talk about as usual. I love how it's all relative to a slow news week and crypto means actually, there's thousands of things happening every day all around the world, but nothing earth shattering like no new law or no new lawsuit. I mean, TBD knock on wood.
Yes, so much to talk about. We are going to dive right in with something very big that happened in my personal area of fun commodities with the CFTC. One of the things I love about this pod is I have been de facto our CFTC commodities person. Jessi, you are our DOJ person and V is our SEC person. This is a perfect make up for the full regulatory sphere in the United States. Everyone wants to hear about this. Everyone needs to hear about this. You have probably seen a lot of talk about perps on crypto Twitter for the past few days. I can tell you probably 90 percent of those tweets have been inaccurate in some form because no one understands perps. No one understands derivatives. I'm going to give you a breakdown of what happened and why it's important.
Hopefully, I'll be speaking in English so Jessi and all of our listeners can truly understand.
First, what happened on Friday is the CFTC approved KalshiEX application to list a perpetual Bitcoin futures contract. I'm going to start there. When someone says perps or a perp, they mean a perpetual futures contract. I'll also mention, KalshiEX is a designated contract market. They're a CFTC regulated DCM. DCMs are so hot right now because prediction markets in the United States list on DCMs and perps now list on DCMs. Also to explain, you have the full sack of CFTC licenses when we're talking about derivatives. There's the DCM, which is the designated contract market. That's the exchange. There's the derivatives clearing organization, the DCO. That's the entity that does the clearing of these contracts. Then there's futures commission merchants, FCMs, which are basically the brokers for commodities. Those are all the participants that we're talking about. There's also introducing brokers, which we'll talk about in another episode. We've referenced that in the Phantom Wallet case. That's entities that can connect to this universe.

**Jessi Brooks** (4:12)
Okay, something that's been helpful for me in trying to understand this space, even after you give these great explanations, is comparing the different entities. Since they have different acronyms, there's maybe too many acronyms to entities in the security space. So which one is more like the exchange? You just mentioned the broker. So to me, that is really helpful in framing this, because I feel like a lot more people are familiar with security law, or at least the entities associated with it.

**Katherine Kirkpatrick Bos** (4:40)
Totally. KalshiEX is the DCM, is the DCM, is the exchange. Then the DCO-

**Jessi Brooks** (4:46)