CME Group sues CFTC over U.S. perpetual futures

CME Group filed a lawsuit on Thursday in the U.S. District Court for the District of Columbia against the Commodity Futures Trading Commission and its chair, Michael Selig. The exchange alleges the agency approved perpetual futures for Kalshi and Coinbase while bypassing the regulatory process required by Congress.

The complaint says the chair “overrode Congress's definition of the term ‘swap' and circumvented the regulatory regime Congress required for that form of derivative.” It adds that treating perpetuals as futures rather than swaps violates the Commodity Exchange Act.

Perpetual futures are contracts without a set expiration date that let traders bet on price moves without owning the underlying asset. They are common in crypto derivatives trading, and the CFTC approved the first U.S.-listed perpetuals last month.

CME argues the approvals allow new firms to enter the retail futures market without following the regulatory regime for swaps and that those firms will compete directly with CME's existing products. The complaint also criticizes the agency for not allowing public comment on Kalshi's application.

CME's chief executive, Terrence Duffy, described perpetuals as “a disaster waiting to happen” and has argued they should be classified as swaps under the Dodd-Frank Act. Duffy has said he will step down from his role in 2027.

The CFTC pushed back in a written statement, calling the lawsuit “lawfare” and accusing CME of choosing litigation over competing in the marketplace. The agency said it expects to defend the approvals and seek dismissal of the claims, and referenced a pro-innovation agenda.

A policy group representing a decentralized perpetual futures exchange criticized the filing, writing that CME is trying to suppress competition and calling perpetual futures “the first genuinely new derivatives product to reach U.S.-regulated markets in over a decade.”

The dispute centers on whether perpetuals should be regulated as futures, which fall under exchange rules, or as swaps, which are subject to a different set of requirements under Dodd-Frank. The court's decision could determine how crypto-linked derivatives are classified and which firms may list them on regulated U.S. platforms.