At a glance

  • The Commodity Futures Trading Commission (CFTC) asked a federal judge in Washington to dismiss CME Group’s challenge to US perpetual futures, arguing in a reply brief filed on Friday, 16 Oct, that CME has no legal standing.
  • The brief cites CME’s own monthly data: volume in its crypto futures rose from 2,660,960 contracts in May to 3,282,530 in September, about 23% higher, after the CFTC approved the first US bitcoin perpetual.

The 31-page filing is the CFTC’s last word on its motion to dismiss in Chicago Mercantile Exchange Inc. v. Selig, No. 1:26-cv-02157, before Judge Colleen Kollar-Kotelly of the US District Court for the District of Columbia, the docket shows. CoinDesk reported the brief on Monday.

What CME is challenging

CME sued in June over a CFTC order of 29 May that approved KalshiEX’s bitcoin perpetual contract as a futures contract, and over a policy statement that lets other exchanges self-certify similar products, according to the complaint. A perpetual has no expiry date, and CME argues that makes it a swap, which carries a different and heavier rulebook.

Kalshi has since self-certified perpetuals on ether, Solana, XRP, Chainlink and Sui, the complaint says. CME lists dated futures on all five.

What the CFTC argues

Standing is the threshold test: a plaintiff must show a concrete injury the court can fix before a judge will hear the merits. The CFTC says CME fails on both counts.

Its volume table shows rises in 11 of 12 CME crypto contracts between May and September, including Micro Bitcoin (1,113,719 to 1,354,088 contracts) and Ether (326,981 to 378,292). Only the Chainlink future was lower, by 340 contracts. The brief also quotes CME’s second-quarter earnings script, in which the exchange said 94% of its first-half volume came from institutions and that it had “not heard demand” from customers for perpetuals.

“CME cannot have it one way with the Court and another way with the investing public on earnings calls,” the agency wrote. It adds that relabelling perpetuals as swaps would not stop registered exchanges from listing them.

What CME and others say

CME’s position, as set out in its complaint, is that the order was issued without public comment and that Congress meant such contracts to be regulated as swaps. CME did not immediately respond to CoinDesk’s request for comment.

CME could yet prevail on standing and on the swaps question, TD Cowen policy analyst Jaret Seiberg said in a note to clients on Monday, as quoted by CoinDesk. His concern is the clock: perps volumes keep growing while the litigation runs, which could make any unwinding harder. The Hyperliquid Policy Center filed an amicus brief backing the CFTC in September.

The judge has already refused the CFTC’s request for early discovery on CME’s standing (28 Sep). CryptoWatchDesk covered the CFTC’s proposal to write event contracts into the swap definition on 10 Oct and CME’s new BCH and UNI futures, which began trading on Monday.

What happens next

The motion to dismiss is now fully briefed and awaits a ruling. If the case survives, the court’s schedule has cross-motions for summary judgment due on 20 Nov, amicus briefs on 4 Dec and oppositions on 14 Dec. Related: the Missouri lawsuits over sports event contracts.

This article is for information only and is not investment advice.