CFTC tells court CME lacks standing to challenge perpetual futures policy

The CFTC’s latest court filing tests whether CME Group, operator of leading global derivatives venues, can block the agency’s opening of perpetual futures trading in the U.S. For BlockWest readers, the outcome decides whether a fast-growing crypto product stays under futures rules or is pushed into the swaps regime.

• The CFTC argued in an October 16 brief that CME has not shown imminent financial injury.
• CME says perps are swaps, not futures, because the contracts carry no expiration date.
• TD Cowen’s Jaret Seiberg warns perps growth during litigation could complicate unwinding the market if CME wins.

• Oct. 16 Date CFTC filed standing brief, after its September dismissal motion
• 1st U.S. bitcoin perp approved in May, ahead of CME’s court challenge

The U.S. Commodity Futures Trading Commission has told a federal court that CME Group lacks legal standing to challenge its perpetual futures policy, CoinDesk reported. In a brief filed Friday (October 16), the agency argued that the exchange operator has not shown it is being harmed by the government’s push into perps. Without harm, the CFTC said, CME has no right to sue.

The agency opened the door to perps in May, approving the first bitcoin perp from Kalshi and signaling that it was open for business on a domestic surge in such contracts. CME objected in court. The CFTC has now answered that the company has no standing to get in the way.

CFTC says CME’s rising crypto futures volume undercuts its harm claim

In the brief, the agency said “Allegations of increased competition, without any plausible inference of an imminent financial injury,” don’t give CME the legal standing to challenge the CFTC’s actions. It noted that volume in crypto futures at CME has actually risen since the policy shift.

The CFTC first asked a federal judge to dismiss CME’s case in September, and the latest filing details its argument on standing. “CME must plausibly allege an actual or imminent increase in competition,” the CFTC argued. “CME has not even done that.”

The agency also turned CME’s investor communications against it, arguing that the company has been telling investors it hasn’t heard of demand for perps and that they aren’t substitutes for the futures it offers. “CME cannot have it one way with the court and another way with the investing public on earnings calls,” the CFTC contended in its brief.

CME’s swaps argument rests on perps having no expiration date

Perps let traders speculate on the future price of an asset, typically with a leveraged position, and the contracts don’t come with a built-in expiration. They had soared overseas, becoming a major form of transaction in crypto derivatives. The CFTC’s move sought to clarify how that market could get rolling in the U.S.

The agency, acting in response to President Donald Trump’s aggressive crypto agenda that included bringing perps into domestic trading, said it will regulate the products on a case-by-case basis as futures. CME has insisted the contracts are not futures, because they have no end date.

In CME’s reading, they are swaps, which would come with an entirely different regulatory approach. Spokespeople for CME didn’t immediately respond to a request for comment on the CFTC’s latest filing. The company’s answer to the standing argument is therefore not represented in the reporting beyond its stated legal position.

Pending dismissal motion will decide whether CME’s challenge proceeds

Jaret Seiberg, a policy analyst at TD Cowen, argued in a Monday client note that CME may still have the edge, both in its standing as a competitor and in its argument that perps may be appropriately treated as swaps. “What increasingly concerns us is the growth in perps while the litigation is playing out,” he wrote.

If this growth continues, it could create complications in trying to unwind this market if the CME prevails in the lawsuit.

Jaret Seiberg, policy analyst at TD Cowen

The clock is ticking on the new market, CoinDesk noted. The reporting gives no date for a ruling on the CFTC’s request to dismiss.

The BlockWest read. We read this fight as a dispute over product classification more than competition. If perps are futures, the venues and brokers building them work under one rulebook; if swaps, under another. Firms listing or trading U.S. perps now carry a classification risk that could outlast any ruling on standing, which is why Seiberg’s unwinding warning matters more than the standing argument.

The next step is the federal judge’s decision on the CFTC’s motion to dismiss, which turns on whether CME has plausibly alleged imminent harm. CME has yet to respond publicly to the standing brief. Seiberg’s open question is whether perps growth outruns the case before a ruling arrives.

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