The CFTC has told a federal court that CME Group has not shown any harm from the first US perpetual futures, and it has put CME’s own words to the judge. The agency filed its brief on Friday, and CoinDesk reported it on 19 October.
The background is a policy change. In May the CFTC approved the first US bitcoin perpetual contract, from Kalshi, and said it would treat perps as futures, reviewed case by case. Perps have no expiry date and usually carry leverage. CME sued, and in September the CFTC asked for the case to be thrown out.
The brief argues standing. Claims of more competition are not enough without a real or imminent financial injury, the agency says, and CME has not alleged one. It adds that CME’s crypto futures volume has risen since the policy changed.
Then comes the sharper point. CME has told investors that it has seen no demand for perps and that they do not substitute for its futures. The CFTC says CME cannot argue one thing to a court and another on earnings calls.
CME’s legal case is that a contract with no end date is not a future at all but a swap, which would sit under a different regime.
Jaret Seiberg of TD Cowen wrote on Monday that CME may still hold the stronger hand on both standing and the swaps argument. He also warned that perps growing during the litigation could make the market harder to unwind if CME wins.
The judge has not ruled on the motion to dismiss. Until then, a market is expanding under a classification a court may yet reject, and nobody has said what would happen to open positions if it does.
