CFTC tells court CME lacks standing to block US perpetual futures

The Commodity Futures Trading Commission filed a court brief on Oct. 17 arguing that CME Group lacks standing to challenge the agency's perpetual futures policy, because the exchange has not plausibly alleged imminent financial injury from the new market.

CME sued in June to undo the CFTC's May 29 approval of Kalshi's bitcoin perpetual as a futures contract. CME's position is that perpetuals are swaps, which would place them under a different regulatory regime and outside the futures framework the CFTC used for approval. The CFTC has asked a federal judge to dismiss the case; the latest brief focuses on standing rather than the swaps-versus-futures merits.

In the filing, the agency pointed to CME's own reporting. Monthly crypto futures volume at CME rose from about 2.66 million contracts in May to 3.28 million in September, and CME has told investors on earnings calls that customers are not asking for perpetuals. "CME cannot have it one way with the court and another way with the investing public on earnings calls," the brief said, according to CoinDesk.

Bankless linked the reply brief on CourtListener and reported that Judge Colleen Kollar-Kotelly will decide whether the case survives after rejecting an earlier CFTC discovery request. Kalshi launched what it called the first stock index perpetual future in America on Oct. 6 while the litigation continues. TD Cowen analyst Jaret Seiberg wrote that continued perps growth during the case could complicate any later unwind if CME prevails.

The standing fight matters because a dismissal on that ground would end CME's challenge without forcing a ruling on whether perpetuals are swaps. That classification question has been contested since the CFTC's May approval, with traditional derivatives venues arguing that the product looks like a leveraged swap and crypto-native platforms treating it as a listed futures contract. The CFTC's May 29 order approved Kalshi's bitcoin perpetual under its existing futures authority, and no other US venue has yet received a comparable green light for a crypto perpetual listed as futures. Kalshi's stock index perpetual launched Oct. 6 expands the product line while the CME case remains unresolved.

CME's complaint, filed in June, argues that perpetual futures share structural features with swaps, including continuous funding payments and no fixed expiry, and therefore should not have been approved as listed futures contracts without a different rulemaking path. The CFTC's May 29 order treated Kalshi's bitcoin perpetual as a futures product under existing authority, which traditional derivatives venues say reclassifies a swap as a listed future without adequate process.

The standing argument is procedural but decisive. If CME cannot show that the CFTC's approval inflicts concrete and imminent injury on the exchange, the court can dismiss without reaching the swaps-versus-futures question. The CFTC's brief leans on CME earnings-call language and rising crypto futures volume to argue the opposite of imminent harm. Kalshi's Oct. 6 stock index perpetual expands the product category while the case continues, increasing the practical stakes of any later unwind.

Judge Kollar-Kotelly has already rejected one CFTC discovery request and will decide next whether the case proceeds past the standing motion. TD Cowen's Jaret Seiberg has written that continued perps growth during litigation could complicate any remedy that requires unwinding trades after the fact. The CFTC has not opened a comparable approval process for other US crypto perpetual listings, so Kalshi remains the only US venue operating under the May order.

CFTC leadership has argued publicly that perpetual futures can fit existing futures regulation when listed on a designated contract market with appropriate surveillance. CME's counter is structural: funding rates and continuous settlement look like swap economics, and the CFTC's May order did not create a new product category with the notice-and-comment process CME says a swap reclassification would require.

The litigation sits inside a broader fight over how token derivatives are classified in the United States. The CFTC has been expanding crypto listing approvals under pressure from Congress and industry, while traditional exchanges protect franchise value in existing futures products. A standing dismissal would leave the classification question open for the next perpetual listing rather than resolve it.