CME's Duffy calls perp funding a swap as CFTC lawsuit heads to full briefing

CME Group will not decide whether to list cryptocurrency perpetual futures until its court fight with the Commodity Futures Trading Commission is resolved, chairman and chief executive Terry Duffy said on the company's third-quarter earnings call Wednesday. On that call he argued a perpetual's funding rate should be treated as a swap rather than a futures contract under United States law, while the company's general counsel said the case is on track to be fully briefed to the judge in December.

The exchange reported a record quarter underneath the legal dispute. Average daily volume hit 29.4 million contracts, up 16% from a year earlier, which Duffy called the highest third-quarter figure in CME's history. Chief financial officer Lynne Fitzpatrick said revenue of $1.7 billion rose 13% from the third quarter of 2025, market data revenue reached a record $243 million, and adjusted earnings per share came in at $3.02, according to Bullished's report on the call. The company returned nearly $1 billion to shareholders through $465 million in regular dividends and $524 million in buybacks.

A Bank of America analyst, Craig Siegenthaler, put the perpetuals question directly: if the case is dismissed and perpetuals are deemed futures in the United States, would CME list its own perpetuals given its exclusivity in equity index futures? CME's new general counsel, John Marchese, answered first. A motion to dismiss has been filed, CME has opposed it, and the company expects the substance of the case to be fully before the judge in December, Marchese said in the full transcript published by The Motley Fool. He said CME is very confident in its position and is awaiting the court's decision.

Duffy then made the classification argument in his own terms. He said the question of whether a product is a perpetual, a future or a swap comes down to looking up the definition of a swap. A swap under Dodd-Frank, he said, is designed as two people exchanging payments for a similar product, and that payment stream is what the perpetual industry calls the funding rate. In his reading, the funding rate of a perpetual is deemed a swap, and CME is fairly confident in that position.

Confidence about the legal theory did not translate into a product roadmap. Duffy said CME will cross that bridge when it arrives and not before, and that he would not make a decision one way or another about going forward with perpetuals. He said CME will abide by whatever the court decides. Pressed later on position-size caps for perpetuals, he added that he will not change his view until he sees a proposal in writing.

The lawsuit is one of several regulatory items on CME's calendar. Duffy said the CFTC's extended comment period on compute futures ends around Nov. 9, after which the agency must decide what to do, and he called its timing unknown. CME's securities clearing launch remains on track for Dec. 7. The exchange also shelved a planned 24-7 small oil contract after commercial participants said they did not want to staff another desk, a decision Duffy paired with complaints that United States participants trade on overseas markets through VPNs without evidence of policing.

Single stock futures, a newer CME line, have traded a little over 350,000 contracts since launch, about $3.5 billion of notional, a CME executive told analysts on the same call. Duffy rejected the idea that every market needs a prediction-market product attached, and said the single stock futures contract will go forward without predictions to start.

Perpetuals have stayed off CME's listed lineup while clients, in the analyst's reference to Duffy's earlier comments, were not asking for them. The lawsuit and Wednesday's answers leave the listing question parked with the court: fully briefed by December, decided whenever the judge rules, and only then answered for certain on whether CME would list a product its chairman says looks, on the funding leg, like a swap.