CME Group filed a lawsuit against the Commodity Futures Trading Commission on Thursday, alleging the agency improperly approved Kalshi's first U.S. perpetual futures contract. The suit, announced a day after outgoing CEO Terry Duffy said CME would challenge the May approval, asks a court to vacate the CFTC's decision and the self-certified products.
The Core Dispute: Futures vs. Swaps
CME argues that perpetual futures, or perps, are actually swaps under the Dodd-Frank Act, not futures, and that the CFTC failed to conduct its own analysis before approving Kalshi's application. The lawsuit states, "The CFTC did not engage in its own analysis of whether its approval of Kalshi’s Bitcoin perpetual as a future is consistent with law," adding that the word "swap" does not appear in the approval order. CME claims the CFTC simply "rubberstamped Kalshi's application," ignoring the legal distinction that carries different regulatory requirements for issuers.
Implications for the Crypto Industry
The case highlights the growing tension around perps, a product popular in crypto but not explicitly addressed in Dodd-Frank. On the same day Kalshi's approval was granted, the CFTC sent a no-action letter to Coinbase, potentially allowing it to list perps via an offshore intermediary. Former Starkware General Counsel Katherine Kirkpatrick Bos noted that "future is not defined anywhere, whereas swap was defined by Dodd-Frank," giving the CFTC discretion to categorize novel products. She added that there is "no clear precedent" on whether a future requires actual delivery.
Market Context
The lawsuit comes as combined exchange volumes fell 3.45% in May to $4.41 trillion, the lowest since September 2024. However, RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high, underscoring the product's growing significance.