CME plans Thursday lawsuit against CFTC over perpetual futures approval

CME Group Chairman and CEO Terry Duffy announced on CNBC that the exchange will file a lawsuit against the Commodity Futures Trading Commission on Thursday, challenging the agency’s approval of perpetual futures contracts.

Duffy argued these “perps” products are actually swaps under the Dodd-Frank Act, meaning platforms like Kalshi would need to register as swap dealers to offer them.

“Under the Dodd-Frank Act, it clearly defines what a swap is and what a future is. And when there are two parties exchanging payments to each other, that’s deemed a swap,” Duffy said.

In late May, the CFTC granted approval for KalshiEX to list the BTCPERP Contract, a perpetual Bitcoin futures product linked to the crypto’s spot price. The regulator stated that the contract satisfied the requirements of the Commodity Exchange Act and all applicable rules governing designated contract markets.

According to Duffy, the legal precedents cited in support of the approvals rely on pre-Dodd-Frank case law and do not reflect the current regulatory framework.

Addressing speculation around the timing of the challenge, the outgoing CEO said the effort had been under development for several months and was carefully reviewed by CME’s board. He rejected suggestions that the action was triggered by recent market events or competitive pressures.

“I’ve been working on this plan with my board for eight months. I didn’t start working on it two weeks ago, Friday, when there was a quick approval of a perpetual future,” Duffy said.

He emphasized that the lawsuit’s goal is to clarify the law rather than target any individual company and said CME wants greater certainty around the regulatory framework before considering comparable products.

Duffy also criticized the CFTC’s interpretation of the issue, arguing that certain public statements by chair Michael Selig regarding market structure, futures definitions, and supporting legal precedent were inaccurate. He said Dodd-Frank has not been adequately considered and believes the matter should be resolved through litigation.