TLDR
- The CFTC asked a federal judge to dismiss CME Group’s lawsuit challenging the approval of crypto perpetual futures.
- The regulator argues that CME has not shown a concrete financial injury and therefore lacks legal standing.
- The CFTC said CME could list similar perpetual futures under the same regulatory framework if it chose to do so.
- CME argues that Kalshi’s Bitcoin perpetual contracts should be classified as swaps rather than futures under U.S. law.
- The agency said a ruling for CME would not eliminate competition because Kalshi could potentially offer similar products as swaps.
The U.S. Commodity Futures Trading Commission (CFTC) has asked a federal judge to dismiss CME Group’s lawsuit over the approval of cryptocurrency perpetual futures. The agency argues that CME has not shown a concrete injury from the decision and therefore lacks legal standing to continue the case.
CFTC Challenges CME Group Standing
In a September 2 filing, the CFTC called the dispute “much ado about nothing.” It said CME has not claimed any clear financial loss tied to the approval of Kalshi’s Bitcoin perpetual futures contract.
The regulator also noted that CME could list similar contracts under the same framework. CME has said its customers have not requested perpetual futures, which the CFTC cited when arguing that any competitive harm results from CME’s own business choice.
Agency Says Court Ruling Would Not Remove Rivals
The CFTC argued that CME cannot show that a favorable ruling would solve its claimed injury. Even if the court classified the contracts as swaps, Kalshi and other registered markets could still offer similar products under that category.
The agency also said tax, reporting, or recordkeeping differences would not remove competition. It added that the Commodity Exchange Act does not protect one exchange from another company’s product decisions or market competition.
CME Disputes Futures Classification
CME filed the lawsuit in June after the CFTC approved Kalshi’s BTCPERP contract as a futures product. The contract tracks Bitcoin’s spot price, trades continuously, has no expiration date, and uses funding payments between long and short positions. The CFTC approved BTCPERP one day after Kalshi submitted it for review.
CME argues that those features fit the legal definition of a swap rather than a futures contract. It also says the CFTC failed to explain why its latest position differs from earlier enforcement cases involving crypto perpetual products. Kalshi began Bitcoin perpetual trading on June 3 and Ethereum perpetual trading the next day.
Judge Orders Administrative Record Process
U.S. District Judge Colleen Kollar-Kotelly recently rejected the CFTC’s request to delay production of the administrative record. The judge said the record could contain evidence related to CME’s claims of competitive injury.
The court ordered both sides to propose a combined briefing schedule by September 4. The case now centers on whether CME can establish standing before the court reaches the broader dispute over how U.S. law should classify crypto perpetual contracts.
