The U.S. Commodity Futures Trading Commission is accelerating its oversight of crypto perpetual contracts amid a high-stakes legal battle with derivatives exchange CME Group.
CME filed its opposition on Oct. 2 in federal court in Washington, pushing back against the CFTC's Sept. 2 motion to dismiss the exchange's lawsuit. The dispute centers on the CFTC's May 29 approval of Kalshi's Bitcoin perpetual futures contract, BTCPERP.
The CFTC has argued that CME lacks Article III standing because it has not shown concrete competitive injury. The regulator called the lawsuit much ado about nothing, saying CME remains free to seek approval for similar products and has publicly stated its customers did not request crypto perpetual futures.
CME contends that the Kalshi contract is legally a swap rather than a futures product because it has no expiration date or delivery obligation and includes funding payments between traders. The exchange also argues the CFTC failed to explain its departure from earlier enforcement cases that classified crypto perpetuals as swaps.
Hyperliquid Policy Center CEO Jake Chervinsky criticized CME's filing, saying it left key competitor standing and Commodity Exchange Act zone-of-interests arguments unanswered. The CFTC's reply is expected around Oct. 16.
Judge Colleen Kollar-Kotelly previously rejected a CFTC request to withhold the administrative record while the dismissal motion was pending, saying it could contain evidence of the competitive injury CME claims.
More broadly, market participants are watching the CFTC's accelerated push to regulate perpetual contracts. New compliance requirements could affect trading strategies, liquidity and volatility, although effective dates have not been announced.
