At a glance

  • Coinbase, Kalshi, Kraken parent Payward, DRW Holdings, Jump Trading and Paradigm Operations have asked the US District Court for the Southern District of New York to accept a brief on the side of the Commodity Futures Trading Commission (CFTC), which is being sued over perpetual futures on single US stocks.
  • The brief, filed on 9 Nov, argues that these “equity perpetuals” are security futures under the Commodity Exchange Act. On 3 Nov a judge found that the challengers were likely to succeed in arguing the opposite.

The six companies filed a proposed amicus brief on Monday in Capital Markets Alliance Association v. CFTC (No. 1:26-cv-09608), backing the agency’s opposition to a preliminary injunction, The Block and Cointelegraph reported.

An amicus brief is a filing from a non-party with an interest in the case; it needs the court’s permission, which is why the firms moved for leave to file it.

What the brief says

According to the brief, Coinbase Derivatives, KalshiEX and Bitnomial, which Payward acquired earlier this year, applied to the CFTC on 18 Sep to list perpetual futures on large-cap US stocks. All three applications were deemed approved on 2 Nov.

The firms argue that equity perpetuals are cash-settled, exchange-traded and centrally cleared, like the security futures Congress already placed under joint CFTC and Securities and Exchange Commission (SEC) oversight. “The one difference is an improvement: equity perpetuals do not expire,” the brief says. A funding-rate mechanism, it argues, keeps their price tied to the stock’s instead.

It also says an injunction would harm Coinbase, Kalshi and Bitnomial by stopping them from listing products the CFTC has already approved.

What the court has said

The Capital Markets Alliance Association (CMAA), whose members include Cboe and Citadel Securities, filed suit on 2 Nov, the day the applications were deemed approved, as CryptoWatchDesk reported when the CFTC opened the door to single-stock perps. It argues that a contract with no expiry is a security-based swap, which falls to the SEC and faces tighter limits on retail trading.

US District Judge Valerie Caproni denied the group’s request for a temporary restraining order on 3 Nov, because it had not shown imminent, irreparable harm. But her order also found that CMAA was likely to succeed on its claim that the CFTC exceeded its authority, since the contracts “do not appear to satisfy the definition of a ‘security future'” and appear instead to be swaps.

That finding came at the emergency stage. The preliminary injunction motion is a separate, fuller decision. The approvals remain in effect while the case proceeds; last Saturday’s Rulebook covered the restraining-order ruling.

What happens next

Under the 3 Nov order, the CFTC’s opposition was due on 6 Nov and CMAA’s reply is due on Tuesday, 10 Nov, a schedule the order says the assigned district judge can change. No hearing date on the injunction had been published at the time of writing.

Related: A day later the SEC filed its own brief backing the CFTC

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