The CFTC filed a brief in federal court Friday arguing that CME Group has no legal standing to challenge the agency's new perpetual futures policy, because the derivatives giant hasn't shown the policy is hurting it.
The fight started in May, when the CFTC approved the first bitcoin perpetual future, from Kalshi, and said it would regulate perps case by case as futures. Perps are typically leveraged contracts with no built-in expiration, and they'd already become a major form of crypto derivatives trading overseas. Bringing them onshore was part of President Trump's crypto agenda.
CME, which operates the leading global venues for derivatives trading, sued. Its argument: perps can't be futures because they never expire. They're swaps, the company says, which would put them under an entirely different regulatory regime.
The standing argument
The agency first asked a judge to dismiss the case last month. Friday's brief details the standing argument, and it has two parts.
Part one: no harm, no lawsuit. The CFTC notes that volume in CME's crypto futures has actually risen since the policy shift. "Allegations of increased competition, without any plausible inference of an imminent financial injury," don't establish standing, the brief says.
Part two is the fun part. The CFTC points out that CME has been telling investors it hasn't heard demand for perps and that perps aren't substitutes for its listed futures. "CME cannot have it one way with the court and another way with the investing public on earnings calls," the agency wrote.
That's a real hit. Either perps threaten CME's business or they don't. CME's lawyers tell the court competition is coming; CME's executives tell shareholders nobody wants the product. The CFTC is betting a judge notices the gap.
The clock problem
CME may still win. Jaret Seiberg, a policy analyst at TD Cowen, wrote in a Monday client note that the company may have the edge both on standing as a competitor and on the underlying claim that perps should be treated as swaps.
His sharper point is about timing. "What increasingly concerns us is the growth in perps while the litigation is playing out," Seiberg wrote. "If this growth continues, it could create complications in trying to unwind this market if the CME prevails in the lawsuit."
Those are the real stakes. Every month this case sits in court, the US perps market that Kalshi kicked off gets bigger. If CME eventually wins and perps get reclassified as swaps, nobody just flips a rule. You unwind open positions and customer accounts across a market that has been growing the whole time.
My read
CME's suit has always looked like an incumbent trying to close a door before competitors walk through it, and the earnings-call contradiction gives that read teeth. But Seiberg's warning cuts both ways. Courts move slowly and markets don't. The longer this runs, the messier any outcome gets, whoever wins.
CME spokespeople didn't immediately respond to CoinDesk's request for comment on the filing.