TLDR
- Arthur Hayes says he is “flattered” that Coinbase is defending US stock perpetual futures in court.
- The CFTC approved Coinbase Derivatives, Kalshi and Bitnomial to offer the products on November 2.
- The Capital Markets Alliance Association is suing to block trading in the contracts.
- Judge Valerie Caproni denied a temporary restraining order, so the approvals stand for now.
- The SEC filed a proposed brief but left key questions open.
Arthur Hayes, co-founder of BitMEX, says he is “flattered” that Coinbase is defending perpetual futures on US stocks in federal court. BitMEX launched its Bitcoin perpetual swap in May 2016. Hayes said Washington’s reaction back then was “less than warm.”
“Ten years later, Coinbase is in federal court defending the right to offer them on US stocks,” Hayes told Cointelegraph. He added a line of his own: “Imitation is the sincerest form of regulation.”
A perpetual future is a contract with no expiration date. Traders can hold a position on a share price for as long as they want. They do not have to roll the trade over when a contract ends.
How the Case Started
On November 2, the Commodity Futures Trading Commission approved applications from Coinbase Derivatives, Kalshi and Bitnomial. The approvals let the three firms offer single-stock perpetual futures. These contracts let traders bet on a share price without owning the stock.
The Capital Markets Alliance Association then sued the CFTC. It says the contracts should be treated as security-based swaps. Those products face tighter limits on retail trading.
The group also argues the CFTC approved the contracts without fully explaining its reasons. It says the agency did not address open regulatory questions. Those points were part of a filing made Tuesday.
On November 3, US District Judge Valerie Caproni denied the group’s request for a temporary restraining order. She said the group had not yet shown likely irreparable harm. She also found the alliance was likely to succeed on its claim that the CFTC went beyond its authority.
The denial is not a ruling on the merits. It only means the approvals remain in place while the case continues.
Who Is Backing the CFTC
On Monday, Coinbase and five other companies filed a brief opposing the alliance’s request to block trading. Kalshi and Payward, the parent company of Kraken, joined Coinbase in the filing. The court accepted the brief on Tuesday.
An amicus brief is a formal note from an outside party. The filer is not part of the case but wants the judge to hear its view. Coinbase officials say US investors should have access to products already offered in other parts of the world.
The US Securities and Exchange Commission also reportedly submitted a proposed brief on Monday. It opposed the alliance’s request to pause trading. The agency said it was reviewing the exchanges’ rules for listing the contracts.
The SEC brief did not say whether the agency would set those rules aside. It also did not say whether the contracts count as security futures or security-based swaps.
The alliance cited about $375 million in reported 24-hour notional trading volume for Kalshi’s stock perpetuals shortly after launch. It claims the products are already pulling business away from traditional stock markets.
Wojciech Kaszycki, a strategy adviser to BTCS SA, said the lack of a fixed expiration date could complicate the case for treating perpetuals as futures.
He warned that a ruling against the CFTC could push trading to offshore and decentralized platforms. “The product doesn’t die; it just changes address,” he said.
The case is still active in federal court, and Judge Caproni has not ruled on the merits.
