CFTC Calls CME’s Kalshi Perpetual Futures Lawsuit ‘Much Ado About Nothing,’ Files to Dismiss

The Commodity Futures Trading Commission wants CME Group’s lawsuit over crypto perpetual futures thrown out entirely, and it isn’t being subtle about how it feels about the case. In a motion filed September 2 in the US District Court for the District of Columbia, the regulator called CME’s claims “much ado about nothing” — a sharp line for a filing between a federal agency and one of the world’s largest derivatives exchanges.

The dispute goes back to June 18, when CME sued the CFTC over the agency’s May 29 order approving Kalshi’s Bitcoin perpetual futures contract, along with a broader CFTC statement allowing other designated contract markets to list similar products as futures rather than swaps. CME’s argument is that perpetual futures function economically like swaps under the Commodity Exchange Act and Dodd-Frank, and that letting Kalshi list them as futures let the CFTC sidestep the tighter oversight that would normally apply. Kalshi began trading Bitcoin perpetuals on June 3 and Ethereum perpetuals the next day; notional volume reportedly topped $100 million on day one and passed $1 billion within the first week.

The CFTC’s motion to dismiss rests on a few core arguments:

• No standing on competitive injury — the agency says CME is free to list its own perpetual futures as a designated contract market any time it chooses, so it cannot claim harm from a regulatory door that is open to it too.
• Self-inflicted harm doesn’t count — the CFTC argues a party can’t establish standing by simply declining to use the same regulatory path available to its competitors.
• No concrete financial loss shown — the filing points to CME’s own Bitcoin and Ether futures volumes in June and August, both of which came in higher than May’s levels, the month the disputed order was issued.
• A win wouldn’t fix what CME claims is broken — even if the court agreed perpetual contracts should be classified as swaps, the CFTC argues competing venues could still offer economically similar products, meaning a ruling for CME would relabel the products without removing the competition CME says is hurting it.

CME now has until October 2 to file its opposition before the court weighs whether to grant dismissal. The underlying legal question the case turns on — whether a perpetual futures contract is properly a “future” or a “swap” under US commodities law — has implications well beyond this one dispute, since that classification determines which regulatory regime, and which compliance burden, applies to an entire product category that exchanges across the industry are racing to launch.

Legal proceedings can take unpredictable turns, and this article is for informational purposes only, not legal or investment advice. Crypto derivatives products carry significant risk, including leverage risk. To learn the basics of how futures and perpetual contracts work, see coin680’s Bitcoin Academy.