ESMA Warns Investment Firms on Crypto Derivatives Regulations

The European Securities and Markets Authority ESMA has issued a warning to investment firms regarding the marketing of crypto-asset derivatives as perpetual futures. In a statement released on February 24, 2026, ESMA highlighted a significant increase in the offering of leveraged perpetual contracts, particularly those linked to bitcoin and ethereum. The authority emphasized that the terminology used to describe these products is irrelevant if a product offers leveraged exposure to a crypto-asset and is cash-settled, it must comply with existing national product intervention measures.
By classifying these crypto derivatives as Contracts for Differences CFDs , ESMA ensures they are subject to the strict protections established in 2018 to prevent significant retail losses. This decision comes in response to reports indicating that some platforms have processed over 1.2 trillion in monthly perpetual volume, often targeting retail users with high leverage that exceeds EU-authorized limits.
Firms must conduct a careful legal analysis of these products the commercial name provided by firms is irrelevant for the categorization
ESMA stated in its directive.
The guidelines issued by ESMA aim to address concerns that firms are using the perpetual label to circumvent CFD restrictions while still offering high-risk exposure to retail clients. While these specific product intervention measures primarily target retail clients, professional and institutional traders typically operate under different leverage and protection frameworks.