Crypto firms are siding with the CFTC in court to defend the classification of perpetual futures as futures, countering a legal challenge from the Capital Markets Alliance that seeks to label them as securities-based swaps.
Coinbase, Kraken, Kalshi and others filed a court brief late Monday arguing single-stock perps are security futures under CFTC/SEC rules, not swaps, supporting the regulator's path to launch these products. A favorable ruling would open a new US product market for Coinbase, but a federal judge has already signaled she believes the challengers' overreach argument has merit, so the outcome is unresolved and the news itself changes little today.
CME's earlier lawsuit argues crypto perps are swaps rather than futures, overlapping with the new Capital Markets Alliance case. The CFTC has moved to dismiss but the matter awaits judicial action, leaving CME's effort to force perps onto swap-style regulation unresolved. The outcome could reshape competitive dynamics in US perps trading, but no ruling has landed.
Cboe is named as a backer of the Capital Markets Alliance, which sued for an emergency halt to single-stock perps on the grounds that they are securities-based swaps under SEC jurisdiction. Halting the products could preserve Cboe's competitive position, but the judge allowed trading to continue while signaling some sympathy to the group's argument, so the effect on Cboe shares is speculative.
Coinbase, Kraken, and Kalshi have filed a court brief in the Southern District of New York supporting the CFTC's classification of single-stock perpetual futures as futures rather than swaps. This move aligns the crypto industry with the regulator against the Capital Markets Alliance, which includes Cboe and Citadel Securities, in an effort to prevent an emergency halt of the products.
Coinbase and other crypto firms argue that perpetual futures on single stocks are security futures regulated by the CFTC (with the SEC involved), not securities-based swaps, so the products can be launched under the CFTC's new path.
No. The judge let trading continue for now but signaled she thinks the challenger group's argument about CFTC overreach has merit, and the CME case is still awaiting judicial action.
CME contends that crypto perpetual futures are swaps, which would subject them to a very different regulatory regime even though the CFTC would still have jurisdiction over them.
It is a new organization backed by Citadel Securities, Cboe and other traditional securities firms that sued the CFTC for an emergency halt to single-stock perpetual futures.