Two lawsuits now ask a federal court to decide what a perpetual future is. Perpetuals are contracts that track a price, like a futures contract, but never expire; traders hold them as long as they like and pay or receive a regular “funding” payment that keeps the contract near the underlying price. They have been the biggest product in offshore crypto trading for years, and this year the Commodity Futures Trading Commission (CFTC) let them onto U.S. markets. Established exchanges and trading firms say the agency got the law wrong.

The cases ask different questions, and the answers carry real consequences for who can list these contracts, who can trade them and which regulator is in charge. This piece covers what the CFTC approved, what each suit claims, what a judge has said so far and the legal argument underneath. It draws on Reuters’ Monday report on the Wall Street pushback and on court and agency material we could verify.

What the CFTC approved

On May 29 the CFTC issued a policy statement on listing perpetual contracts and, alongside it, an order approving KalshiEX’s bitcoin perpetual as a futures contract, according to the agency’s press release. The release says perpetuals on other asset classes warrant case-by-case review. The same day, CFTC staff said certain crypto perpetuals may be treated as foreign futures and issued a no-action letter that lets Coinbase Financial Markets post customer crypto and stablecoins as margin at an affiliate that trades on Deribit’s foreign board of trade. That letter is not a domestic approval of a Coinbase perpetual, a distinction that gets blurred in some coverage.

Single-stock perpetuals followed. Kalshi’s September 18 filing asked for CFTC review of 58 perpetuals covering 55 stocks, an Alibaba share certificate and two index funds, with a daily funding payment between long and short traders and a minimum margin of 15.5 percent, which works out to roughly 6.5 times leverage by our arithmetic. Bitcoin Magazine, citing the contracts, puts the maximum at 4.9 times. The approval reportedly came when the CFTC’s 45-day review period lapsed without a written order. Kalshi, Coinbase Derivatives and Bitnomial are the named applicants, and Kalshi launched four contracts. For the onshore launch side of the story, see our earlier piece on U.S.-regulated crypto perpetuals.

Lawsuit one: CME v. CFTC

CME Group’s exchange sued the CFTC and Chairman Michael Selig in federal court in Washington on June 18, according to Lowenstein Sandler and The Block. It challenges the May 29 bitcoin perpetual approval. The complaint argues perpetuals are swaps, not futures, under the Commodity Exchange Act; that the agency acted arbitrarily by not analyzing the swap definition; that it changed course without explanation; and that the policy statement allowing self-certification is unlawful. CME asks the court to vacate the approval and the policy statement. The CFTC moved to dismiss around September 2, arguing CME has shown no injury and could list similar contracts itself, and a former U.S. solicitor general filed a proposed amicus brief for the Hyperliquid Policy Center backing dismissal. We found no ruling or hearing date. The case details come from law-firm and news summaries; we did not read the complaint or docket.

Lawsuit two: the Capital Markets Alliance

The second suit came last week. The Capital Markets Alliance, a newly formed trade group whose reported members include Cboe, Citadel Securities and the Healthy Markets Association, sued the CFTC and Selig on November 3 in federal court in Manhattan over the single-stock perpetuals. Reuters and other outlets describe it as a challenge by Cboe and Citadel; the named plaintiff is the group. It argues the contracts are security-based swaps that fall under the Securities and Exchange Commission, not futures under the CFTC, and that the approval lacked a reasoned explanation and ignored investor and securities-market risk, according to Ledger Insights and The Trade. It asks the court to vacate the approvals and halt trading while the case proceeds.

On November 3 Judge Valerie Caproni denied the group’s request for an emergency halt, finding imminent harm had not been shown, according to Bitcoin Magazine and Ledger Insights. In the same ruling she said the CFTC likely exceeded its authority and that the contracts appear to meet the swap definition. That is a preliminary view, not a decision on the merits, and the Reuters report does not mention it. The case moves to Judge Lorna Schofield on an expedited schedule: the CFTC’s opposition to a preliminary injunction was due November 6 and the group’s reply is due Tuesday, November 10. We could not confirm the CFTC filed on time.

Futures or swaps?

The two sides are arguing about definitions that carry large costs. A futures contract is traditionally an agreement for delivery at a future date, and it faces a lighter regulatory regime and different tax treatment. A swap, by contrast, includes contracts that exchange payments tied to a price or value, and swaps face heavier margin, reporting and dealer rules. CME says a perpetual’s funding payments transfer price risk without conveying ownership, which it says makes the contract a swap. The CFTC says funding stands in for expiration and that perpetuals keep the features of futures. For stocks there is a third category: a security future is a delivery contract on a stock, and Judge Caproni reportedly reasoned that a perpetual never delivers, so it looks like a swap and, on a stock, a security-based swap overseen by the SEC. No court has issued a final ruling on either question. Our glossary defines perpetual futures.

Why the incumbents object

Reuters reports the objections as a mix of legal and market concerns. Funding payments make perpetuals look like swaps, which face tougher rules and less retail access. Thin futures-style margin and automatic liquidations can amplify stress. Around-the-clock trading strains clearing, banking and collateral systems. Cboe’s Rob Hocking said classification has become a competitive tool, and CME chief executive Terry Duffy said the CFTC muddied the waters. Cboe chief executive Craig Donohue framed the issue as investor protection and the rule of law, according to The Trade. CME has also pointed to Kalshi’s perpetual passing $1 billion in volume within a week, while the CFTC counters that CME’s own executives said customers did not ask for perpetuals, per Dechert and Decrypt. The CFTC has called the Alliance suit troubling and said markets should be governed by law, not litigation campaigns. Reuters also reports that offshore crypto perpetual volume reached $61.7 trillion in 2025, with leverage up to 50 times on some venues, and that some executives do not see the product as a major threat to institutional business.

The politics

Reuters reports that Democrats are expected to step up oversight of the CFTC when the new Congress convenes. On November 3, Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, criticized the equity perpetuals approval and cited insider trading, investor risk and volatility, without naming a specific demand. Ledger Insights describes Selig as the CFTC’s only sitting commissioner. We found no Democratic leader who has pledged legislation or hearings on perpetuals, so the oversight expectation is Reuters’ reading, not a stated plan. Reports say Democrats won both chambers in the midterms, though some races were uncalled as of November 4.

What we could not confirm

We did not read either complaint or either docket, so every account of the claims comes from law-firm and news summaries. We could not confirm whether the CFTC filed its November 6 opposition or what it argued, when or how exactly the single-stock approval took effect, or whether the Alliance’s complaint pleads the Administrative Procedure Act expressly. Reuters says Robinhood has entered the market, which we could not verify. We also found no evidence that Polymarket or Crypto.com’s exchange is an approved perpetuals venue.

Why it matters

The CFTC’s approvals opened U.S. markets to a product that has so far been mostly offshore. If a court agrees the contracts are swaps, or security-based swaps, the approvals could be vacated and the SEC could become a regulator of stock perpetuals. If the CFTC prevails, Kalshi, Coinbase Derivatives and others can keep building. Either way, the next signals are Judge Schofield’s ruling on the preliminary injunction and any hearing in the CME case. This is reporting, not legal or investment advice.

Further reading

Frequently asked

What is a perpetual future?

A contract that tracks the price of an asset like a futures contract but has no expiration date. Traders pay or receive a periodic funding payment that keeps the contract’s price close to the asset’s price. Offshore crypto exchanges have traded them for years, and the CFTC allowed some onto U.S. markets in 2026.

Who is suing the CFTC over perpetual futures?

CME Group’s exchange sued on June 18 in Washington over the May 29 bitcoin perpetual approval, arguing the contracts are swaps. The Capital Markets Alliance, a trade group whose reported members include Cboe, Citadel Securities and the Healthy Markets Association, sued on November 3 in Manhattan over single-stock perpetuals, arguing they are security-based swaps.

Did a court block the single-stock perpetuals?

No. On November 3 Judge Valerie Caproni denied an emergency halt because imminent harm was not shown, while saying the CFTC likely overstepped and the contracts appear to be swaps. That is a preliminary view, and the case continues on an expedited schedule.

Why does the futures-versus-swaps label matter?

Futures face a lighter regulatory regime and different tax treatment, while swaps face heavier margin, reporting and dealer rules, and security-based swaps fall under the SEC. The label decides which regulator oversees the contracts and who can trade them.

What happens next in the cases?

In the Capital Markets Alliance case the group’s reply on its injunction request is due November 10 under Judge Lorna Schofield. In the CME case the CFTC has moved to dismiss, and we found no ruling or hearing date.