CFTC Asks Judge to End CME Suit Over Perpetual Crypto Contracts

The U.S. Commodity Futures Trading Commission (CFTC) has moved to dismiss CME Group’s lawsuit over the agency’s approval of crypto perpetual futures, arguing that the exchange has failed to establish that it suffered any actual harm.

In a motion filed Wednesday, the regulator described CME’s challenge as “much ado about nothing” and said the exchange lacks constitutional standing because it has not pointed to a concrete financial injury resulting from the CFTC’s decision.

The agency said its order does not give any exchange an exclusive right to list perpetual contracts. CME and other registered designated contract markets can offer comparable products if they satisfy the conditions set out in the order.

The CFTC also highlighted CME’s previous statement that its customers have not expressed interest in perpetual futures. The regulator argued that any competitive disadvantage resulting from CME’s decision not to list the products is therefore self-inflicted.

Even if CME prevails, the CFTC said, competing products would not necessarily disappear. Kalshi and other designated contract markets could continue offering similar contracts as swaps, meaning a different classification would not resolve CME’s claimed competitive concerns.

The agency additionally argued that the Commodity Exchange Act does not protect CME’s interest in limiting competition from rival exchanges.

What Triggered CME’s Lawsuit?

CME sued the CFTC in June after the regulator approved Kalshi’s BTCPERP product as a futures contract. The cash-settled instrument follows bitcoin’s spot price, operates continuously and has no expiration date. Funding payments between long and short traders are used to keep its value close to the underlying spot price.

The CFTC’s May 29 order also applies to comparable perpetual contracts based on other digital commodities with deep, active and continuously operating spot markets. Perpetual products tied to other asset classes remain subject to case-by-case review under a separate policy statement.

CME argues that contracts with no expiration date or delivery obligation, but which use funding payments between traders, fall under the legal definition of swaps rather than futures.

The exchange has also claimed that the CFTC failed to explain why it departed from previous enforcement actions that treated crypto perpetual contracts as swaps.

Judge Rejects Delay in Administrative Record

U.S. District Judge Colleen Kollar-Kotelly last week rejected the CFTC’s request to delay releasing the administrative record until the court rules on the dismissal motion.

The judge said the documents could contain evidence relevant to CME’s allegations of competitive harm. She has instructed the two sides to submit a joint proposal for the briefing schedule by September 4.