CFTC Urges Court to Toss CME Lawsuit Over Crypto Perpetuals

The U.S. Commodity Futures Trading Commission (CFTC) has asked a federal court to dismiss CME Group’s lawsuit challenging the regulator’s approval of cryptocurrency perpetual futures. The agency argues that CME has failed to demonstrate any actual harm resulting from the decision.

In a motion filed Wednesday, the CFTC described the case as “much ado about nothing,” arguing that CME lacks constitutional standing because it has not identified a specific financial injury.

The regulator also noted that the order being challenged does not give exclusive approval to any particular exchange. Instead, it allows any registered designated contract market, including CME, to list similarly structured perpetual products.

The CFTC further pointed out that CME has said its customers have not expressed demand for perpetual futures. As a result, the agency argued that any competitive disadvantage stemming from CME’s decision not to list the products would be the exchange’s own choice.

According to the CFTC, even if CME wins the lawsuit, competing perpetual products would remain available. Kalshi and other designated contract markets could continue offering the contracts as swaps, meaning a change in their regulatory classification would not necessarily eliminate the competitive pressure CME says it faces.

The agency also argued that CME’s attempt to shield itself from competition does not fall within the types of interests that the Commodity Exchange Act was intended to protect.

CME’s Challenge to Crypto Perpetuals

CME filed its lawsuit against the CFTC in June after the regulator approved Kalshi’s BTCPERP contract as a futures product. The cash-settled contract follows bitcoin’s spot price, operates continuously without an expiration date and uses periodic funding payments between long and short traders to keep its value aligned with the underlying market.

The CFTC’s May 29 order also applies to comparable perpetual contracts based on other digital commodities, provided those assets have deep, active and continuously operating spot markets. Perpetual products connected to other asset classes remain subject to individual reviews under a separate policy statement.

CME maintains that contracts lacking an expiration date or delivery requirement, while relying on funding payments exchanged between traders, fit the legal definition of swaps rather than futures.

The exchange has also argued that the CFTC did not adequately explain why it changed course from previous enforcement matters in which similar crypto perpetual contracts were treated as swaps.

Meanwhile, U.S. District Judge Colleen Kollar-Kotelly rejected the CFTC’s request last week to delay production of the administrative record until the dismissal motion was resolved. The judge said the documents could contain evidence relevant to CME’s allegations of competitive harm.

She ordered both sides to submit a proposed joint briefing schedule by September 4.

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