CoinDesk
The US Commodity Futures Trading Commission asked a federal judge on Wednesday to throw out CME Group's challenge to the agency's approval of cryptocurrency perpetual futures, arguing the derivatives exchange has not shown it was concretely harmed by the decision. The regulator called the dispute "much ado about nothing."
The motion to dismiss, filed in US District Court for the District of Columbia, is the CFTC's first substantive defense against the June suit in which CME contested the agency's May 29 order letting Kalshi list a cash-settled bitcoin perpetual contract. The regulator said CME lacks constitutional standing because it has not alleged a concrete financial loss, and noted that the order at issue allows any registered designated contract market, including CME itself, to list similarly structured products.
Why it matters
The case will decide whether US-licensed venues can list crypto perpetuals under the regulator's futures framework, or whether those contracts must be treated as swaps. CME argues perpetuals meet the legal definition of swaps because they have no expiration date or delivery obligation and use funding payments between long and short positions to track spot. The CFTC's motion leans on a procedural argument rather than re-litigating that classification question, betting the judge will dismiss before the swap-versus-futures fight reaches the merits.
A dismissal would entrench the CFTC's May 29 framework and clear the path for other DCMs to launch their own perpetuals. A ruling for CME would not necessarily pull Kalshi's BTCPERP off the market: the CFTC noted Kalshi and other designated contract markets could continue offering similar contracts as swaps regardless of how the court rules on classification.
Market impact
The judge, Colleen Kollar-Kotelly, already rejected the CFTC's request to withhold the administrative record and ordered the parties to propose a combined briefing schedule by September 4. That timeline puts a possible ruling on the dismissal motion within months, well before any merits decision on whether perpetuals should be reclassified.
Frequently asked questions
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What is Kalshi's BTCPERP contract?
BTCPERP is a cash-settled bitcoin perpetual futures contract approved by the CFTC on May 29. It trades around the clock, has no expiration date, and uses periodic funding payments between long and short positions to track bitcoin's spot price.
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Why did CME sue the CFTC?
CME sued in June after the CFTC approved Kalshi's BTCPERP as a futures contract. CME argues perpetuals without an expiration date or delivery obligation meet the legal definition of swaps, and that the CFTC departed from earlier enforcement cases that classified crypto perpetuals as swaps.
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What is the CFTC's main argument for dismissing the suit?
The CFTC argues CME lacks constitutional standing because it has not alleged a concrete financial loss. It says the order at issue allows any registered designated contract market, including CME, to list similar products, and that any competitive harm from CME's decision not to offer perpetuals is self-inflicted.
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What happens if CME wins the lawsuit?
A ruling for CME would not pull Kalshi's BTCPERP off the market, since Kalshi and other designated contract markets could relist similar contracts as swaps. It would, however, force a reclassification of perpetuals under the CFTC's framework and complicate the regulator's May 29 approval pathway.
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When is the next court deadline?
Judge Colleen Kollar-Kotelly has ordered the parties to propose a combined briefing schedule by September 4, putting a possible ruling on the dismissal motion within months and well ahead of any merits decision.
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