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The European Union's MiCA framework forces unauthorized crypto asset service providers to wind down spot operations by July 1, closing one regulatory door on offshore crypto venues. The other door is wide open: perpetual futures, which account for roughly 80% of total crypto trading volume according to Glassnode, fall outside MiCA's jurisdiction entirely. ESMA acknowledged in February that crypto products marketed as "perpetual futures" likely meet the existing definition of contracts for difference, which would trigger leverage caps, mandatory margin close-out rules and a ban on trading incentives. Nothing in MiCA or MiFID, however, blocks European retail from opening an account at Hyperliquid, Aster or other offshore perps venues and trading BTC with up to 200x leverage.
Why it matters
Patrick Gruhn, founder and CEO of Perpetuals.com, argues the regulatory framework is backfiring. ESMA's own 2018 review of CFD data found that 74% to 89% of retail accounts across EU jurisdictions lost money, with average losses between €1,600 and €29,000. His own dataset on crypto perpetuals shows retail loss rates in the same range, with a striking share of accounts wiped out entirely. The empirical predicate ESMA used to restrict CFDs applies independently and fully to crypto perps, he writes, yet the product is being sold to the same European retail with multiples of the leverage cap and none of the consumer protections. The result, Gruhn warns, is that European retail traders may end up worse off after MiCA's transition ends, funneled from a no-leverage spot product toward the most dangerous product in the market.
Market impact
The asymmetry is also a competitive one. Licensed EU derivatives providers must absorb compliance costs, leverage caps and bonus bans that offshore venues simply ignore, while platforms like Hyperliquid reach European users through a self-custody wallet in minutes. ICE chair Jeffrey Sprecher recently called Hyperliquid "bigger than NASDAQ" with a staff he described as eleven people.
Frequently asked questions
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What is the July 1 MiCA deadline for crypto exchanges?
Unauthorized crypto asset service providers must wind down spot operations in the European Union by July 1, the end of MiCA's transitional period. The deadline applies to spot trading only; perpetual futures are not covered under MiCA.
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Why are perpetual futures a regulatory loophole in the EU?
Perpetual futures fall outside MiCA's jurisdiction, and MiFID's third-country regime lacks a single prohibition equivalent to MiCA's Article 61. The result is that European retail can reach offshore perps venues like Hyperliquid and Aster with no leverage cap or loss limit enforced by EU regulators.
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How much of crypto trading volume is in perpetual futures?
Roughly 80% of total crypto trading volume takes place in perpetual futures, according to Glassnode data cited in the piece. Perpetuals are leveraged contracts for difference settled in cash, with no expiry.
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What leverage is available on offshore crypto perp platforms for EU users?
Hyperliquid offers up to 50x leverage on Bitcoin, and Aster offers up to 200x. Neither is authorized under MiCA or MiFID, and neither is subject to EU leverage caps, margin close-out rules, or loss limits.
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What is the retail loss rate on CFDs and crypto perps in Europe?
ESMA's 2018 review found 74% to 89% of retail CFD accounts across EU jurisdictions lost money, with average losses between €1,600 and €29,000. Perpetuals.com's own dataset on crypto perpetuals finds retail loss rates in the same range, with a striking share of accounts wiped out entirely.
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