Theodore Gillibrand, son of New York Senator Kirsten Gillibrand, raised $30 million for American Perpetuals Exchange Corporation (APEC), a new perpetual futures trading venue. Fortune reported Thursday the funding round was led by Lux Capital at a $300 million valuation. APEC plans to file for a Designated Contract Market license with joint oversight from the CFTC and SEC to list perpetual contracts on single-name equities, according to a June 4 memo. The filing comes as the CFTC and SEC collaborate on a harmonization strategy to unify their approach to novel markets including crypto and perpetual futures.
APEC Files June 4 Memo for Joint CFTC-SEC Oversight
APEC's June 4 memo outlines plans to file for a Designated Contract Market license with a special exemption to list perpetual contracts on single-name equities under joint CFTC and SEC oversight. The memo states that the absence of a regulated U.S. venue redirects demand to offshore platforms outside U.S. oversight, where participants have no recourse and regulators have no visibility. Representatives from APEC, SEC and CFTC officials, Gibson, Dunn & Crutcher LLP, BGR Group, and crypto lawyer Rebecca Rettig of Arktouros PLLC attended the June 4 meeting.
CFTC Approved Kalshi and Coinbase Perpetual Products in May
In May, the CFTC approved Kalshi's request to list the first official bitcoin perpetual contract in the U.S. and permitted Coinbase to list long-dated perp-style futures. Kraken announced it launched crypto perpetual futures trading on Kraken Pro. The CFTC and SEC are collaborating on a harmonization strategy to unify their approach to novel markets and asset classes like crypto and perpetual futures.
CME Sues CFTC Over Perpetual Futures Approvals
CME Group sued the CFTC over the Kalshi and Coinbase approvals, arguing that perpetual futures are legally swaps under the Dodd-Frank Act, not futures. CME alleges Kalshi and Coinbase were permitted to sidestep stricter swap rules meant to protect against systemic risks, and accuses the agency of suddenly changing course.
APEC Plans Derivatives Clearing Organization License Application
APEC intends to apply for a Derivatives Clearing Organization (DCO) license, which would allow it to clear transactions in-house. The June 4 memo states APEC seeks significant capital infusion as part of the licensing process, as DCM/DCO registration requires demonstrated financial resources and extensive legal expenditure. Capital is allocated towards regulatory capital and compliance infrastructure, building out the compliance team, technical systems, and legal framework required for exchange operations. The memo notes the company that most aptly navigates the licensing process will have a considerable market edge, and as the first regulated perpetuals exchange there is endless potential for value capture.
Theodore Gillibrand Background and Senator Gillibrand's Crypto Advocacy
Theodore Gillibrand is a recent graduate from Stanford University and an alum of venture capital firm Paradigm, a significant Kalshi backer, as well as a former Andreessen Horowitz intern, according to his LinkedIn page. Senator Kirsten Gillibrand (D-NY) is a significant crypto industry backer. She is a frequent collaborator with Republican Senator Cynthia Lummis, who together introduced the Responsible Financial Innovation Act in 2022 and 2023, and more recently the GENIUS Act covering stablecoins, which became law last summer.
FAQ
What did Theodore Gillibrand raise funding for?
Theodore Gillibrand raised $30 million led by Lux Capital at a $300 million valuation for American Perpetuals Exchange Corporation (APEC), a new perpetual futures trading venue planning to file for a Designated Contract Market license under joint CFTC and SEC oversight.
Why did CME Group sue the CFTC?
CME Group sued the CFTC over approvals granted to Kalshi and Coinbase, arguing that perpetual futures are legally swaps under the Dodd-Frank Act, not futures, and that the companies were permitted to sidestep stricter swap rules meant to protect against systemic risks.
