Crypto Perpetuals Classification Fight Escalates As CFTC Challenges CME’s Legal Standing
The U.S. Commodity Futures Trading Commission has asked a federal court to dismiss CME Group‘s lawsuit challenging the regulator’s treatment of cryptocurrency perpetual contracts as futures. In a motion filed on September 2, the agency argued that the world’s largest derivatives marketplace lacks legal standing to bring the case, undermining the foundation of CME’s complaint.
The dispute originated after the CFTC approved Kalshi’s Bitcoin perpetual contract in late May, enabling the product to trade on the regulated KalshiEX platform under the futures framework. CME filed suit in mid-June, contending that perpetual contracts—derivative instruments without fixed expiration dates that use recurring funding payments to track underlying asset prices—should be regulated as swaps rather than futures. The exchange claimed the approval granted newer venues an unfair competitive advantage and created an uneven regulatory landscape.
The CFTC countered that CME itself is a designated contract market and could seek approval to list comparable perpetual products under the exact same regulatory policy it is challenging. The agency characterized any resulting competitive disadvantage as self-inflicted, noting that a plaintiff cannot establish standing by voluntarily declining to use an opportunity available to its competitors. The regulator also cited CME’s own trading data, observing that Bitcoin and Ether futures volumes in June and August exceeded levels recorded in May, suggesting no concrete competitive injury has materialized.
Redressability and the Classification Debate
Beyond standing, the CFTC questioned whether a favorable ruling for CME would actually redress its alleged harm. Even if the court reclassified perpetual contracts as swaps, the regulator noted that competing venues could still offer economically similar products to traders. The agency further argued that CME’s competitive interests fall outside the zone of interests protected by the Commodity Exchange Act provisions cited in the lawsuit.
The motion sets the stage for a broader legal examination of how perpetual contracts should be categorized under U.S. law. CME maintains that the absence of fixed expiration dates places these instruments squarely within the swap definition established under the Dodd-Frank Act.
The CFTC disagrees, asserting that federal law does not require futures to carry predetermined settlement dates—a position previously articulated by CFTC Chair Michael Selig, who has emphasized that regulated perpetual contracts remain subject to domestic margin, leverage, and customer protection requirements. Kalshi has defended its product and characterized the lawsuit as an effort to limit competition, while CME Chief Executive Terry Duffy has warned that perpetual products could encourage excessive speculation.
Industry observers have weighed in on the proceedings. Jake Chervinsky, chief executive of Hyperliquid, commented on the motion in a social media post, stating that the CFTC’s arguments were compelling and characterizing the lawsuit as “much ado about nothing.”
CME must file its opposition to the dismissal motion by October 2. The court may dismiss the case on procedural grounds without resolving the underlying classification question, which would leave the CFTC’s existing policy and Kalshi’s approval intact.
If the court finds standing, the case would proceed to examine whether the agency misread the Commodity Exchange Act in treating perpetuals as futures—a determination that could influence future exchange applications for crypto and commodity-linked perpetual products, including additional offerings reportedly under development at Kalshi.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
