CME to Sue CFTC Over Perpetual Futures Approval

CME Group plans to file a lawsuit on Thursday challenging the Commodity Futures Trading Commission's approval of perpetual futures contracts. CEO Terrence Duffy asserts the contracts should be treated as swaps under the Dodd‑Frank Act, which would place them under a different regulatory regime.

Perpetual futures, often called perps, are derivative contracts with no expiration date that let traders take price exposure without owning the underlying asset. Many perpetual contracts use a funding-rate mechanism that shifts payments between long and short holders to keep prices aligned with spot markets.

Last month the CFTC approved bitcoin perpetual contracts as futures, cleared Kalshi to offer such products and issued a no-action stance for Coinbase Financial Markets on related digital-commodity derivatives. CME says those actions were reached too quickly for a novel product and are legally incorrect for perps.

Duffy has raised concerns about contract design and high leverage available on some trading venues. Speaking at a conference earlier this month, he said, “I have grave concerns with the way these contracts are set up,” and warned the market could become risky for inexperienced traders. He compared current speculation to conditions he observed before the 2008 financial crisis and called the situation “a disaster waiting to happen.”

CME's legal challenge will argue that perpetuals meet the statutory definition of swaps, requiring different clearing, reporting and compliance obligations than futures. The company said it will seek a court ruling to reclassify the contracts and is prepared for litigation; Duffy has signaled he will pursue the case before stepping down as CEO in March 2027.

Perpetuals have grown in popularity on crypto-focused platforms, especially outside the United States where regulatory treatment has been less certain. Regulators around the world have reached different conclusions about whether funding-rate mechanics fit the legal definitions of futures or swaps, producing a fragmented trading landscape.

The lawsuit will ask a court to decide whether perpetual contracts are swaps or futures under Dodd‑Frank and to clarify the regulatory obligations that apply to those products.