Crypto Exchanges Offer China Stock Perpetuals, Raising Regulatory Questions

Crypto exchanges are increasingly emerging as an ‘alternative access route’ for offshore investors seeking exposure to Chinese artificial intelligence and semiconductor equities—assets that are often difficult to trade directly due to mainland market restrictions. The trend highlights how the boundary between crypto-native derivatives and regulated capital markets is becoming increasingly blurred, raising fresh questions for regulators about what these products represent and who should oversee them.

According to a report published by the Financial Times on July 25, several trading venues including TradeXYZ and Gate.com have launched ‘perpetual futures’ contracts designed to track the share price of Chinese chipmaker CXMT ahead of its expected listing on Shanghai’s stock exchange. Data compiled by Coinglass shows CXMT-linked perpetual futures recorded roughly $19 million in trading volume over the past 24 hours, underscoring a rapid pickup in activity.

CXMT is widely viewed as a bellwether in China’s domestic semiconductor push and has become a popular proxy among mainland investors looking to bet on the country’s AI supply chain. For many foreign investors, however, direct participation is constrained by a web of market-access programs and eligibility rules. The company is reportedly aiming to raise close to $10 billion in its initial public offering, which would make it one of mainland China’s largest IPOs since 2010—an event that is drawing global attention to valuation expectations before the first official trade prints.

The appeal of these instruments lies in their flexibility. Perpetual futures—originally developed in crypto markets to speculate on assets like Bitcoin (BTC)—have no expiry date and do not confer ownership rights to the underlying asset. They are typically traded on crypto exchanges and margined in stablecoins, making them easy to access for global users who may be blocked from the spot equity market. Over time, the same structure has been repurposed to provide synthetic exposure to everything from public equities to pre-IPO companies such as SpaceX and OpenAI, mirroring demand for ‘real-time liquidity’ in assets that are otherwise hard to reach.

Matthew Fisher, CEO of decentralized finance platform Katana, described the shift as an evolution from tokenizing short-term government debt to building liquid markets around assets that global investors “cannot realistically access,” including foreign stocks and pre-listing companies. In a similar expansion, TradeXYZ also announced on July 22 a perpetual futures product tied to Gigadevice Semiconductor, a Shanghai-listed chip company, offering up to 10x leverage.

In the CXMT case, offshore perpetual futures are effectively being used to sidestep China’s controlled gateways for foreign capital. Non-mainland investors typically rely on channels such as the Hong Kong Stock Connect program or the Qualified Foreign Institutional Investor framework to access Shanghai and Shenzhen-listed shares, both of which impose quotas, and in Stock Connect’s case, limit the universe of eligible names. The STAR Market (Shanghai’s tech-heavy board where CXMT is expected to list) also maintains additional requirements for domestic retail participation, including minimum asset thresholds and trading experience rules—illustrating how layered the access regime can be.

Pricing dynamics add another draw. Pre-IPO perpetual futures tend to reflect the market’s collective expectation of how a company will be valued at listing. If the stock begins trading above the implied level embedded in the perpetual contract, holders can profit from the spread. Iggy Iope, chief investment officer at tokenized real-asset firm Theo, said the structure relies on the assumption that the derivative will eventually converge toward the underlying once spot trading begins, with data feeds linking the reference price to the publicly traded market.

Because these contracts do not expire, they may remain a vehicle for tracking price movements even after the stock lists—extending their utility beyond a single IPO catalyst. Market participants also point to additional use cases. Russ, head of trading at crypto market maker Auros, argued that pre-IPO perpetuals can serve as a hedging tool for insiders holding equity stakes, citing similar patterns observed in SpaceX-related products. He characterized the surge in attention as a sign of financial innovation creating ‘new asset classes’ that traditional finance does not currently offer, but that real-world demand is proving out.

Regulators, meanwhile, face a definitional challenge. The key question is whether stock-linked perpetual futures should be treated as securities, custodial yield claims, or synthetic derivatives—each of which could imply different compliance burdens and supervisory regimes. Andy Liu, a senior analyst at HTX Research, said the central issue is what these products legally represent, arguing they look less like true equity ownership and more like leveraged ‘prediction markets’ built on price outcomes.

Regulatory scrutiny has already begun to surface. The Monetary Authority of Singapore (MAS) recently placed Hyperliquid—described as a major venue for trading CXMT-linked perpetuals—on its investor alert list, which flags entities that could be mistakenly perceived as licensed, authorized, or regulated by MAS. Still, market participants argue that enforcement is difficult when products are offered across borders and outside a given jurisdiction’s perimeter.

Auros’ Russ suggested that whether individual governments can effectively curb such instruments remains an “open question,” framing the rise of stock-linked perpetual futures as part of a longer-term convergence between crypto markets and legacy finance. If the trajectory continues, he said, it would not be surprising to see broad swaths of U.S., Hong Kong, and Japanese equities eventually traded in crypto market form—an outlook that, if realized, would further test how global regulators draw the line between ‘crypto’ and traditional financial products.