- Former FTX US president Brett Harrison criticizes high leverage on volatile crypto assets as irresponsible.
- Harrison plans to launch a new perpetual futures exchange for traditional assets with limited leverage.
- The new platform, Architect, will restrict leverage to a maximum of 25X on stable assets and lower on volatile ones.
- Crypto perpetual futures generate $1.3 trillion monthly, with some platforms offering up to 1,001X leverage.
- Proponents argue high leverage democratizes access; critics warn it leads to liquidation cascades and market instability.
Brett Harrison, former president of FTX US, announced he will soon launch a perpetual futures exchange called Architect that does not include crypto markets. He stated that offering high leverage on volatile crypto assets is “irresponsible” and a “major problem.” Harrison plans to limit leverage on his new platform and focus on traditional stocks, foreign exchange, and other asset classes.
According to Harrison, Architect will allow users to trade perpetual futures—derivative contracts with no expiration date—on stable assets like the EUR/USD pair, with leverage capped at 25X. More volatile stocks, such as Tesla, will have lower maximum leverage, around 8X. This stands in contrast to some crypto platforms that offer leverage as high as 1,001X on digital assets. Although crypto will not be listed, some stablecoins can be used as collateral on Architect.
Perpetual futures permit traders to borrow capital and amplify gains or losses. If a market moves against a trader’s position, losses rise with leverage and can lead to forced closure, or liquidation. Harrison highlighted that excessive leverage encourages traders to lose their capital quickly, calling it “much more of a gambling platform than an actual futures trading platform.”
The crypto perpetual futures market now handles about $1.3 trillion in monthly volume, partly fueled by decentralized exchanges like Hyperliquid and Aster. These platforms often allow retail investors to access extreme leverage, up to 1,001X, without traditional investor protections like identity verification or risk assessments. Advocates say this levels the playing field by providing more users access to advanced trading tools.
Still, Harrison warns that allowing high leverage without proper safeguards leads to liquidation cascades, which can disrupt markets and harm retail traders. He stresses the importance of exchanges enabling “safe and secure” long-term trading rather than encouraging rapid account losses.
For more on perpetual futures and leverage, visit DefiLlama and Architect.
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