CFTC asks court to dismiss CME suit over perpetuals

The U.S. Commodity Futures Trading Commission filed a motion Wednesday in the U.S. District Court for the District of Columbia asking a judge to dismiss a suit brought by CME Group. The commission and Chair Michael Selig say CME lacks standing and has not shown it suffered a concrete financial injury from the agency’s actions.

CME sued the CFTC in June after the agency approved perpetual futures tied to the spot price of bitcoin for prediction markets platform Kalshi and issued a no-action position for similar products on the Coinbase exchange. In its complaint CME argued that Selig acted without the approval of a full five-commissioner panel and improperly treated certain “futures” as “swaps,” which it said violated the Commodity Exchange Act.

In the motion to dismiss, lawyers for Selig and the commission argued CME did not demonstrate likely financial harm. The filing noted that any exchange registered with the CFTC can list perpetual futures on digital assets and that CME did not claim it could not list identical contracts itself. The filing reads: “This lawsuit is much ado about nothing.” The commission requested an oral hearing on the motion; as of Thursday no hearing date was on the public docket.

Perpetual futures are derivative contracts that follow the price of an underlying asset and do not have a set expiration date, unlike traditional futures that settle at a predetermined time. Regulators have debated whether such products should be regulated as futures or treated as swaps under the Commodity Exchange Act because of how they are structured and settled.

CME, one of the largest regulated derivatives exchanges, offers bitcoin futures that have fixed expirations. In its June complaint the company argued the CFTC’s actions could harm regulatory clarity and place it at a competitive disadvantage. The CFTC’s response says there is no rule preventing CME or any other registered exchange from listing perpetual futures and that the plaintiff has not pointed to a legally cognizable injury.

A CFTC spokesperson described the lawsuit as “lawfare.” The court’s ruling on standing will determine whether the case proceeds to the merits of CME’s claims about statutory interpretation and agency procedure. If the judge grants dismissal on standing grounds, the suit would end without resolving how perpetual crypto futures should be classified under U.S. law.