CME Sues the CFTC to Stop Kalshi and Coinbase Crypto Perpetual Futures

CME Group, the world's largest derivatives exchange, sued the U.S. Commodity Futures Trading Commission and its chairman, Michael Selig, on June 18, asking a federal court in Washington to void the agency's approval of 24/7 crypto perpetual futures listed by Kalshi and Coinbase. The complaint targets the CFTC's May 29 order letting Kalshi list a bitcoin perpetual contract, plus a same-day policy statement that opened the door for other exchanges to self-certify similar products and a separate no-objection that cleared Coinbase to route U.S. investors to perpetuals on its foreign venue, Deribit. Neither Kalshi nor Coinbase is named as a defendant.

This is a fight over crypto derivatives, not the sports event contracts that have Kalshi tangled with state regulators. Perpetual futures, or "perps," track an underlying asset such as bitcoin but carry no expiration date, so traders hold leveraged positions indefinitely. They are the single most heavily traded product in crypto, and for roughly a decade that volume sat almost entirely offshore, beyond the reach of U.S. exchanges and regulators. The CFTC's May order brought the product onshore for the first time. CME wants it reversed.

The swap-versus-future question the case turns on

CME's argument is narrow and definitional. It says perpetual contracts are legally swaps under the 2010 Dodd-Frank Act, a classification the agency itself had previously accepted, and that the CFTC reversed course without explanation when it blessed Kalshi's product. The complaint alleges the approval order "closely mirrors" Kalshi's own reasoning rather than independent analysis, and calls the agency's conduct arbitrary and capricious. The distinction is not academic: swaps and futures carry different tax treatment, oversight requirements and risk-management standards. A swap designation would force perps under stricter Dodd-Frank rules and narrow the path for new entrants.

The CFTC counters that nothing in the Commodity Exchange Act requires a futures contract to have a fixed expiration date, and that regulated U.S. perps already carry leverage limits matching other futures. A CFTC spokesperson called the suit "frivolous." Kalshi spokesperson Elisabeth Diana said it reflects fear of competition rather than a dispute over the law. Selig has framed the approval as part of a push to bring crypto trading onshore under domestic oversight rather than ceding it to offshore platforms, language that tracks the Trump administration's stated goal of making the U.S. the "crypto capital of the world." CME CEO Terry Duffy, who is set to step down in March 2027, tied the suit to "regulatory uncertainty and market integrity" and rejected any link to his planned exit.

Why CME is spending legal capital on this

The competitive math explains the urgency. Kalshi's perpetuals are the fastest-growing launch in its history. Trading topped $1 billion in notional volume within seven days and reached more than $5.5 billion inside two weeks, with three separate days clearing $1 billion, activity co-founder Tarek Mansour tied partly to the FIFA World Cup and the NBA Finals. CME's own complaint alleges Kalshi has since self-certified more than a dozen additional crypto perpetual contracts under the policy statement without seeking individual approval. The exchange labels the approval a "textbook competitive injury," arguing it hands new entrants products that could pull retail traders off established venues. Markets noticed: CME shares fell roughly 9% after the ruling, and Intercontinental Exchange, the NYSE parent, also dropped.

For affiliates and B2B operators watching prediction markets push into derivatives, the case sets the legal ceiling on how fast Kalshi and Coinbase can scale. A win for CME could force the CFTC to unwind its approvals and stall the rollout of perpetual products across the industry. A win for the CFTC reinforces the agency's discretion to approve new contract structures and accelerates the move to bring crypto perps onto regulated U.S. rails, the same self-certification mechanism that fuels the Kalshi platform now eyeing a $40bn valuation. The outcome also feeds the broader prediction-market regulatory split playing out across states and courts, though that fight concerns sports event contracts, a separate legal track from this one.

History gives Kalshi reason for confidence. When the CFTC tried to block its election event contracts, a D.C. district court vacated the agency's decision in September 2024, the D.C. Circuit denied the CFTC's emergency stay in October 2024, and the agency voluntarily dropped its appeal on May 7, 2025, leaving the pro-Kalshi ruling intact and election markets lawful. CME's own track record against the agency is thinner: it sued the CFTC in 2012 over a swaps-data reporting rule, arguing the mandate exceeded the agency's authority. This time CME is the incumbent trying to slow a faster rival rather than the upstart, a reversal that surfaces in other corners of the sector, including traditional brokerages now adding prediction-market trading. The case lands on an already crowded CFTC docket, and both sides are positioning it as the ruling that decides where and how U.S. crypto perpetual futures get regulated.