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CME Group filed suit against the CFTC on Thursday challenging the agency's approval of crypto perpetual futures in the U.S. for Kalshi and Coinbase, and TD Cowen's Washington Research Group says the world's largest derivatives exchange has the stronger legal hand.
TD Cowen managing director Jaret Seiberg told clients he expects CME to seek a preliminary injunction blocking the contracts while the case proceeds. The core of CME's argument: the Commodity Exchange Act requires a futures contract to involve delivery at a set future date, and since perps never expire, they should legally be classified as swaps — which carry different registration, margin, and tax treatment.
Why it matters
Seiberg said CME's Administrative Procedure Act arguments look strong. The CFTC had previously treated perpetual contracts as swaps and sought public comment on the issue in April 2025, yet approved Kalshi's bitcoin perpetual futures in a single day without issuing a new regulation. He argues that about-face may violate the APA because the agency failed to engage in independent decision-making or adequately explain why the product qualifies as a futures contract rather than a swap.
The distinction is more than semantic. Swap dealers face registration requirements and five-day margin rules, while futures benefit from one-day margin requirements and a more favorable tax regime — the kind of structural advantage that has shaped where liquidity pools in U.S. derivatives for decades. Kalshi's application, Seiberg noted, leaned on case law that predates Congress's framework for swaps.
Market impact
The CFTC has framed the suit as "lawfare" against a pro-innovation agenda and signaled it will move to dismiss. Kalshi called it fear of competition, while Coinbase backed the regulator's approach. Days after the filing, the CFTC and SEC jointly requested public comment on updating derivatives rules — covering swap definitions, existing exemptions, and how perps and prediction-market event contracts should be classified.
Seiberg expects a status conference and litigation schedule to be set soon, with the injunction request as the next major catalyst.
Frequently asked questions
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What is CME's lawsuit against the CFTC actually about?
CME sued the CFTC after the agency approved crypto perpetual futures for Kalshi and Coinbase. CME argues perps should legally be classified as swaps, not futures, because they never expire — a distinction that carries different registration, margin, and tax treatment.
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Why does TD Cowen think CME has the upper hand?
TD Cowen's Jaret Seiberg said CME has both procedural and substantive advantages. The CFTC previously treated perps as swaps and sought public comment, then approved Kalshi's bitcoin perps in a single day without new rulemaking — an about-face Seiberg argues may violate the Administrative Procedure Act.
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What happens next in the CME vs CFTC case?
TD Cowen expects CME to seek a preliminary injunction blocking the approved perps while litigation proceeds. Seiberg also expects a status conference and litigation schedule to be set soon, with the injunction request as the next major catalyst.
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Why does the swap vs futures classification matter?
Swap dealers face registration requirements and five-day margin rules, while futures benefit from one-day margin requirements and a more favorable tax regime. The classification shapes where liquidity pools in U.S. derivatives markets.
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How have the CFTC, Kalshi, and Coinbase responded?
The CFTC called the suit "lawfare" against a pro-innovation agenda and said it will move to dismiss. Kalshi called it fear of competition, while Coinbase backed the regulator's approach. The CFTC and SEC also jointly requested public comment on updating derivatives rules days after the filing.
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