CFTC says CME lacks standing in perpetual futures court fight

Key points

• The agency says CME's crypto futures volumes have risen since the policy shift.
• TD Cowen's Jaret Seiberg says rapid perps growth could complicate unwinding the market if CME wins.

The US Commodity Futures Trading Commission has pushed back on CME Group's legal challenge to its perpetual futures policy, arguing in a court brief that the derivatives giant has not shown it is being harmed. According to CoinDesk, the filing says allegations of tougher competition, without a plausible prospect of imminent financial injury, do not give CME standing to sue. The agency also noted that CME's crypto futures volumes have risen since the policy change.

The CFTC opened the door to perpetual futures in the US in May, approving the first Bitcoin perp from Kalshi and saying it would regulate such products case by case as futures. The move followed President Donald Trump's crypto agenda, which included bringing perps into domestic trading. Perps let traders take typically leveraged positions on an asset's price with no built-in expiry date.

CME, which runs leading global derivatives venues, argues that contracts without an end date are not futures but swaps, which would fall under a different regulatory regime. The CFTC first asked a federal judge to dismiss the case last month, and Friday's brief sets out its standing argument in more detail. It said CME has told investors it has seen no demand for perps and that they are not substitutes for its own futures, adding that the company cannot argue one way in court and another on earnings calls.

What to watch: A federal judge must rule on the CFTC's request, first made last month, to dismiss CME's lawsuit.

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