The Commodity Futures Trading Commission has asked a federal judge to dismiss CME Group’s lawsuit over the approval of crypto perpetual futures, arguing the derivatives giant cannot point to a single dollar of concrete financial injury. The motion, filed Wednesday in the US District Court for the District of Columbia, calls the case “much ado about nothing” and asks for an oral hearing before the court rules.
CME sued the regulator in June after the CFTC approved a bitcoin perpetual futures contract for prediction markets platform Kalshi and issued a no-action position covering similar products on Coinbase. The cash-settled contract tracks bitcoin’s spot price, trades around the clock and carries no expiration date. Periodic funding payments between long and short positions keep its price close to the underlying market, the same mechanism used by offshore exchanges for years.
The exchange argues that contracts without an expiration date or delivery obligation, and which exchange funding payments between traders, meet the legal definition of swaps rather than futures. It also accused CFTC Chair Michael Selig of acting without a full panel of five commissioners, in violation of the Commodity Exchange Act, and of failing to explain a departure from earlier enforcement cases that classified crypto perpetuals as swaps.
No standing, the agency says
The CFTC’s motion attacks the case on standing grounds first. The agency said CME has not alleged, and cannot plausibly allege, that it suffered a financial injury from the authorization of perpetual futures contracts. The order CME is challenging allows any registered designated contract market, including CME itself, to list similarly structured products.
The filing also leans on CME’s own public statements. The exchange has said its customers have not asked for perpetual futures, so any harm from choosing not to offer them is self-inflicted, the agency argued. Lawyers for Selig and the commission wrote that CME does not argue it could not list the same type of futures contract.
Even a win in court would not remove the competing products, the motion adds. If the judge agreed the contracts are swaps, Kalshi and other designated contract markets could keep offering them under that label. Reclassifying the contracts would not remedy the competitive injury CME claims, the filing argues, because the same products would remain available to the same traders.
The agency went further, contending that CME’s effort to shield itself from competition falls outside the interests the Commodity Exchange Act was designed to protect. A CFTC spokesperson had earlier called the June complaint frivolous and described it as lawfare.
The fight behind the fight
At stake is which US venue captures perpetual futures, a product type that generates most of its trading volume on offshore crypto platforms. Kalshi’s approval on May 29 brought the format into the regulated US market for the first time, and Coinbase received a no-action position for comparable products shortly after. CME, the largest regulated derivatives venue in the country, has so far stayed out of the segment entirely.
The case also tests how much latitude a CFTC chair has to reclassify products without a full commission vote. CME’s complaint centers on that process question as much as the competitive threat, arguing Selig treated futures as swaps with expiration dates unilaterally and without proper explanation.
US District Judge Colleen Kollar-Kotelly last week rejected the CFTC’s request to withhold the administrative record until the dismissal motion was decided. She wrote that the material could contain evidence of CME’s claimed competitive injury and ordered both parties to propose a combined briefing schedule by September 4.
Selig and the commission requested an oral hearing on the motion. No hearing had been scheduled on the public docket as of Thursday.
A busy season for the agency
The dispute lands at a moment when the CFTC is moving on several crypto fronts at once. It has proposed rules addressing conflicts between prediction market exchanges and their affiliates, a response to concerns that platforms could trade against their own users or favor related market makers. It is also seeking public input on AI compute futures contracts, a new asset class tying derivatives to the price of graphics processing capacity, as CME prepares an October launch of its own product in that category.
The commission’s posture toward perpetuals marks a break with its own enforcement history. Past cases treated crypto perpetual contracts as unregistered swaps, which is the premise CME’s lawsuit rests on. The approval of Kalshi’s contract as a futures product instead of a swap is the departure the exchange wants a court to examine.
The market context adds weight to the fight. Bitcoin has rallied hard in recent days, breaking $85,000 at one point as short positions worth hundreds of millions of dollars were liquidated, and institutional interest in regulated crypto derivatives keeps climbing. US spot bitcoin ETFs have absorbed billions in net inflows this year, and the venues that capture derivatives volume around those holdings stand to collect substantial fee revenue.
For traders, the near-term practical effect is limited either way. Kalshi’s bitcoin perpetual remains live, Coinbase’s products continue under the no-action position, and a ruling on the motion is likely months away. The bigger question is structural: whether US regulated venues can host the funding-rate products that dominate global crypto volume, or whether that format stays offshore.
An adverse ruling for the CFTC would not necessarily kill the products, but it could force re-listing under a swaps framework with different disclosure and margin rules. A dismissal, by contrast, would leave Selig’s approach intact and likely embolden more US venues to add perpetuals. Either outcome reshapes where crypto derivatives volume settles in the United States, which is why both sides are treating an otherwise technical standing fight as worth litigating hard.