The U.S. Commodity Futures Trading Commission filed a 30-page motion on September 2 asking a federal judge to dismiss CME Group’s lawsuit challenging its approval of Kalshi’s Bitcoin perpetual futures, calling the dispute “much ado about nothing.” The filing argues CME cannot prove it would suffer competitive injury from Kalshi’s BTCPERP contract, a product the exchange claims should be classified as a swap rather than a futures contract.
CME sued the CFTC in June after the regulator approved KalshiEX’s BTCPERP agreement on May 29 under its futures regulations. The contract, which allows traders to take leveraged positions on Bitcoin without an expiration date, went live as the first regulated crypto perpetual futures product in the United States. CME argued the contracts meet the legal definition of swaps under the Commodity Exchange Act and should be subject to different regulatory requirements.
The CFTC’s core argument
In its September 2 filing in the U.S. District Court for the District of Columbia, the CFTC made two central arguments. First, it contended that CME lacks standing because it has not demonstrated that Kalshi’s perpetual futures would cause it measurable competitive harm. The regulator pointed out that the order allowing BTCPERP applies to any designated contract market, including CME itself, meaning the exchange could list its own perpetual futures product if it chose to do so.
Second, the CFTC rejected CME’s claim that perpetual futures are swaps. The regulator argued that even if the contracts were reclassified, it would not remedy CME’s alleged competitive injury, since the classification dispute does not address the question of market competition. The filing did not ask the court to resolve the broader legal question of whether perpetual futures are futures or swaps, sidestepping what could have been a landmark ruling on crypto derivatives classification.
“The complaint does not plausibly allege that the BTCPERP order caused CME any competitive harm,” the CFTC wrote in its motion. “The order allows any designated contract market, including CME, to list these products.”
Why CME is fighting this
CME’s objection to Kalshi’s Bitcoin perpetual futures is not just about a single contract. The exchange, which dominates regulated derivatives markets globally, has long argued that crypto perpetual futures are fundamentally different from traditional futures because they lack a settlement date. In CME’s view, the absence of an expiration date makes these products swaps under the Commodity Exchange Act, which would place them under a different regulatory regime and potentially require different disclosures and margin requirements.
The stakes extend well beyond one product. If CME succeeds in reclassifying perpetual futures as swaps, it could affect how other platforms list similar instruments. Several crypto-native exchanges have signaled interest in offering regulated perpetual futures in the U.S. market, and a swap classification would add compliance costs and regulatory friction to those plans. The ruling could also set precedent for how the CFTC handles future crypto derivatives products.
The case has also drawn attention from the prediction market space. Kalshi, which initially built its business on event contracts tied to elections and economic data, expanded into crypto derivatives earlier this year. The CFTC’s approval of BTCPERP opened the door for other regulated platforms to list perpetual futures on commodities including Bitcoin and potentially Ether.
What happens next
Judge Colleen Kollar-Kotelly, who last week rejected the CFTC’s request for an expedited schedule, set October 2 as the deadline for CME to file its response to the dismissal motion. A hearing date has not been announced.
CME’s legal team will need to demonstrate not just that perpetual futures resemble swaps, but that the CFTC’s approval of BTCPERP specifically harmed CME’s competitive position. That is a higher bar than the swap classification question, and the CFTC’s motion appears designed to force CME onto that harder ground.
The judge’s previous decisions suggest she is treating the case with procedural care. By denying the CFTC’s request for an expedited timeline, Kollar-Kotelly signaled that the court wants a thorough briefing process rather than a rushed resolution. This could push any final ruling into 2027, giving the regulatory landscape time to evolve around the case.
The broader regulatory picture
The dispute sits at the intersection of two broader regulatory trends: the CFTC’s effort to expand its oversight of crypto derivatives, and traditional exchanges’ push to protect market share as crypto-native platforms enter regulated territory. If the dismissal motion succeeds, it would clear a path for more crypto perpetual futures products on U.S.-regulated exchanges. If CME prevails on standing and the case moves forward, it could delay or reshape the regulatory framework for these instruments.
The outcome will also influence how the Commodity Exchange Act is applied to digital assets in the years ahead. Congress is currently debating the CLARITY Act, which would define the CFTC’s jurisdiction over crypto commodities. A court ruling on perpetual futures classification could either reinforce or complicate those legislative efforts, depending on the court’s reasoning.
CME itself has been expanding into crypto products, launching Bitcoin and Ether futures in 2021 and options in 2022. The exchange has long positioned itself as the regulated venue for institutional crypto derivatives, and Kalshi’s entry into perpetual futures threatens that positioning by offering a product that appeals to the same institutional and retail traders who trade perpetuals offshore.
For now, Kalshi’s BTCPERP continues to trade on its platform, and the CFTC’s approval remains in effect. CME has not listed its own perpetual futures product, despite the CFTC’s suggestion that it could do so. The next filing deadline is October 2, when CME must respond to the dismissal motion. The crypto derivatives market will be watching closely as this case could reshape how perpetual futures are regulated in the United States for years to come.
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