CME Group has filed a lawsuit against the U.S. Commodity Futures Trading Commission after the regulator approved crypto perpetual futures that have already generated more than $1 billion in trading volume.
Summary
- CME has sued the CFTC, arguing crypto perpetual futures should be regulated as swaps under Dodd-Frank.
- The exchange claims the regulator bypassed congressional requirements when approving Kalshi’s perpetual contracts.
- Legal experts say the CFTC may have authority to classify novel products, creating uncertainty around CME’s case.
According to Bloomberg, the derivatives exchange sued the CFTC and its chairman, Michael Selig, arguing that the agency improperly classified crypto perpetual contracts as futures instead of swaps.
The legal challenge comes days after several regulated perpetual products gained approval in the United States, opening a market that has long been dominated by offshore exchanges.
Earlier this week, outgoing CME Chief Executive Terrence Duffy told CNBC that the company planned to take legal action after the regulator cleared platforms including Kalshi and Coinbase to offer regulated crypto perpetual futures.
Duffy argued that perpetual contracts fall under the swap category established by the Dodd-Frank Act and should not be treated as standard futures products.
In its complaint, CME stated that the CFTC departed from its own historical approach toward similar instruments. The exchange argued that the regulator had previously viewed perpetual-style products as swaps and that the latest approvals bypassed procedures Congress established for that market segment.
The filing further alleges that the approval process did not go through formal rulemaking despite creating a new framework for perpetual contracts. According to the complaint, Chairman Selig effectively overrode statutory definitions established by Congress when authorizing the products.
CME challenges classification of crypto perpetual contracts
At the center of the dispute is Kalshi’s Bitcoin perpetual futures contract, which received CFTC approval on May 29. According to the regulator, the BTCPERP product can remain listed as long as it complies with the Commodity Exchange Act and existing CFTC regulations.
While approving the contract, the CFTC also stated that perpetual structures may not be appropriate for every asset class and indicated that products would continue to be reviewed individually.
As previously reported by crypto.news, Kalshi later expanded beyond Bitcoin-linked contracts, launching additional perpetual products tied to cryptocurrencies including Ethereum, XRP, and Hyperliquid. The exchange has since disclosed that its perpetual futures business generated more than $5.5 billion in trading volume within weeks of launch.
Separately, crypto.news reported that Coinbase secured a regulated route to offer certain crypto perpetual futures products in the U.S. through infrastructure connected to Deribit, the derivatives exchange it acquired.
CME’s complaint also references intellectual property and licensing concerns. Duffy told CNBC that CME holds exclusive agreements with benchmark providers and argued that related products should be routed through CME regardless of whether they use a perpetual structure.
Legal experts see uncertainty around CME’s claims
Responding to the lawsuit, a CFTC spokesperson told Bloomberg that CME had chosen litigation instead of competing directly in the market. The spokesperson characterized the challenge as opposition to the Trump administration’s pro-innovation regulatory approach and argued that established firms were resisting increased competition.
Legal analysis from StarkWare General Counsel Katherine Kirkpatrick suggested the outcome may not be straightforward. In a June 18 X post, she noted that the CFTC previously treated perpetual products as swaps during its enforcement case against Binance, although she added that enforcement positions do not create binding precedent.
Kirkpatrick also stated that federal law does not require the CFTC to spend 45 days reaching a decision or maintain a quorum before acting, meaning the chair may have authority to approve products independently.
Addressing CME’s competitive injury argument, she said the exchange would still need to demonstrate actual harm and noted that offshore perpetual trading venues already compete with CME regardless of the agency’s decision.
According to Kirkpatrick, perpetual contracts remain a relatively new product category in the U.S., making it unlikely that Congress specifically addressed them when passing Dodd-Frank.
“Perps are still new(ish), which means they weren’t intended to be addressed by Congress when Dodd-Frank was passed. The CFTC has discretion to categorize novel products, & its choice of future vs swap here is reasonable.”
