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The Chicago Mercantile Exchange sued the U.S. Commodity Futures Trading Commission and its chairman, Michael Selig, on June 18, challenging the agency’s decision to let prediction-market platform Kalshi and crypto exchange Coinbase list perpetual futures.
The lawsuit, filed in federal court in Washington, seeks to void the CFTC’s May 29 approval allowing Kalshi to list bitcoin perpetual futures contracts, along with a related policy statement permitting other futures exchanges to offer similar contracts. The CFTC said the same day it would not object if Coinbase gave U.S. investors access to perpetual futures on its foreign exchange, Deribit.
Swap or future? The Dodd-Frank dispute behind the lawsuit
CME argues that crypto perpetual contracts are legally swaps under the 2010 Dodd-Frank Act — a classification the CFTC itself had previously accepted, according to the complaint. CME says the agency reversed course without explanation when it approved Kalshi’s product and that the order “closely mirrors” Kalshi’s own reasoning rather than independent analysis.
The exchange contends the CFTC acted arbitrarily and capriciously by classifying the contracts as futures rather than swaps, a distinction that carries different tax treatment, oversight requirements and risk-management standards.
Perpetual futures, sometimes called “perps,” are derivatives that track the price of an underlying asset such as a cryptocurrency. Unlike standard futures, they carry no expiration date, letting traders hold positions indefinitely, often with significant leverage. Neither Kalshi nor Coinbase was named as a defendant.
Kalshi’s perpetuals boom raises the competitive stakes
The case arrives as Kalshi’s foray into perpetuals has gained rapid traction. CME’s complaint alleges that Kalshi has since self-certified more than a dozen additional crypto perpetual contracts under the CFTC’s policy statement — without seeking individual CFTC approval — and that trading volume in those products already tops $1 billion.
CME calls the approval a “textbook competitive injury,” arguing it hands new entrants products that could pull retail traders away from established exchanges.
Investors appeared to register the competitive threat: shares of CME Group and Intercontinental Exchange, parent of the New York Stock Exchange, fell after the CFTC’s approval.
CFTC, Kalshi call the lawsuit fear of competition
According to news by Reuters, a CFTC spokesperson dismissed the lawsuit as “frivolous,” framing it as an attempt by an incumbent exchange to slow competition rather than a genuine legal dispute. Kalshi spokesperson Elisabeth Diana made a similar argument, saying the suit reflects fear of competition rather than a dispute over the law.
Chairman Selig has cast the CFTC’s approach as part of a broader push to bring crypto trading activity onshore under U.S. regulation rather than ceding it to offshore platforms, and has framed perpetual futures as a way to support that goal while keeping the products subject to domestic oversight.
CME, for its part, has clashed with the CFTC before: in 2012, it sued the agency over a rule requiring it to report nonpublic swaps data to third-party repositories, arguing the mandate exceeded the CFTC’s authority.
The ruling that could define U.S. perpetual futures
The case turns on a single definitional question — whether perpetual futures are swaps or futures under the Commodity Exchange Act — but the implications are broad.
A ruling for CME could force the CFTC to unwind its approvals and slow the rollout of similar products across the industry. A ruling for the CFTC would reinforce the agency’s discretion to approve new contract structures and could accelerate the broader push to bring crypto perpetuals onto regulated U.S. exchanges.
The lawsuit also lands amid a wider expansion at Kalshi, which has moved well beyond its original event-contract business into crypto derivatives and, according to its leadership, is in discussions with regulators about additional perpetual products outside the crypto sector. That trajectory mirrors moves by other fintech players, including Coinbase’s expansion into stocks and prediction markets and Robinhood’s broadening product lineup.
The litigation adds to an already crowded docket for the CFTC, which is separately defending its oversight of prediction markets in lawsuits brought by state regulators over sports event contracts. For now, both sides are positioning the case as a defining moment for how — and where — crypto perpetual futures will be regulated in the United States.
