The U.S. Commodity Futures Trading Commission (CFTC) is asking a federal judge to throw out CME Group’s lawsuit over the regulator’s decision to approve cryptocurrency perpetual futures.
In a motion filed Wednesday, the agency argued that CME has not shown any concrete financial injury from the approval and therefore lacks the constitutional standing needed to pursue the case. The CFTC dismissed the dispute as “much ado about nothing.”
The regulator said its order does not give any exchange exclusive authority to offer the products. Any registered designated contract market, including CME, can list perpetual contracts that meet the requirements outlined in the order.
The CFTC also cited CME’s own public statements that customers have not requested perpetual futures. Because CME has chosen not to list the products, the agency argued that any resulting competitive disadvantage is self-imposed rather than an injury caused by the regulator.
Even a court victory for CME would not necessarily prevent rival exchanges from offering the contracts, according to the CFTC. Kalshi and other designated contract markets could still provide similar products by classifying them as swaps. As a result, changing the regulatory treatment would not necessarily address the competitive concerns raised by CME.
The CFTC further contended that protecting CME from competition is not an interest covered by the protections established under the Commodity Exchange Act.
Why CME Is Challenging the CFTC
CME brought the case in June after the CFTC approved Kalshi’s BTCPERP product as a futures contract. The cash-settled instrument is designed to follow bitcoin’s spot price, operates continuously and does not have an expiration date. Funding payments between long and short traders are used to keep the contract’s price close to the underlying spot market.
The CFTC’s May 29 order also permits comparable perpetual contracts tied to other digital commodities with deep, active and continuously operating spot markets. Perpetual contracts involving other types of assets remain subject to individual regulatory review under a separate policy statement.
CME argues that a contract with no expiration date or delivery obligation, combined with funding payments exchanged between traders, should legally be classified as a swap rather than a futures contract.
The exchange has also accused the CFTC of failing to adequately justify its change in approach, pointing to earlier enforcement actions in which crypto perpetual contracts were classified as swaps.
Judge Allows Administrative Record to Move Forward
U.S. District Judge Colleen Kollar-Kotelly last week declined the CFTC’s request to delay release of the administrative record until the court rules on the dismissal motion.
The judge said the record could contain evidence relevant to CME’s claim that the CFTC’s decision has caused competitive harm. She directed both parties to submit a joint proposal for the case’s briefing schedule by September 4.
