CME Group Chief Executive Terrence Duffy said the company plans to file a lawsuit against the U.S. Commodity Futures Trading Commission (CFTC) over its recent approval of perpetual futures products.
Speaking to CNBC on Wednesday, Duffy argued that the perpetual futures contract approved for Kalshi does not align with the legal definition of a futures product under the Dodd-Frank Act. Instead, he said the structure appears to fit the definition of a swap, which is subject to a separate regulatory framework.
According to Duffy, the Dodd-Frank Act draws a clear distinction between futures and swaps, with transactions involving ongoing payment exchanges between counterparties generally falling into the latter category. As such, he questioned the CFTC’s decision to approve the product as a futures contract.
Duffy, who is set to step down from CME next year, said the exchange would need clearer regulatory guidance before considering the launch of its own perpetual futures offerings. He noted that the current regulatory landscape remains ambiguous.
The CME chief also criticized the agency’s handling of broader market initiatives, suggesting the CFTC had, in some cases, presented policy proposals as established rules. He specifically pointed to the regulator’s comments regarding round-the-clock trading.
“There are significant issues that need to be addressed,” Duffy said.
In response, a CFTC spokesperson accused CME of choosing litigation over competition, arguing that established market players are resistant to a more level playing field. The agency said it is prepared to defend its position and expects any legal challenge to be unsuccessful.
