CFTC Seeks Dismissal of CME Challenge to Kalshi Bitcoin Perpetuals

The regulator says CME cannot show concrete harm from its approval of Kalshi’s bitcoin perpetual futures and argues the exchange’s competitive concerns do not establish legal standing.

The U.S. Commodity Futures Trading Commission (CFTC) has asked a federal judge to dismiss CME Group’s challenge to the regulator’s approval of cryptocurrency perpetual futures, arguing that the derivatives exchange has failed to demonstrate a concrete injury.

In a motion filed Wednesday, the CFTC described CME’s lawsuit as “much ado about nothing” and argued that CME lacks constitutional standing because it has not identified a financial loss resulting from the agency’s decision.

At the center of the dispute is the CFTC’s May 29 approval of Kalshi’s BTCPERP contract as a futures product. The regulator said the order does not give Kalshi exclusive treatment: any registered designated contract market, including CME, can list similarly structured perpetual contracts subject to the applicable requirements.

CFTC challenges CME’s claim of competitive harm

The CFTC argued that CME’s alleged injury is largely self-inflicted because the exchange has publicly said its customers have not requested perpetual futures.

Under that reasoning, the regulator said CME cannot establish harm simply because it has chosen not to offer a product that competitors can list.

The agency also argued that even a ruling in CME’s favor would not eliminate competing perpetual products from the U.S. market.

Kalshi and other designated contract markets could continue offering similar contracts if they were classified as swaps rather than futures, meaning the relief CME is seeking would not necessarily resolve the competitive disadvantage it claims to face.

The CFTC further argued that competition with other exchanges is not the type of interest the Commodity Exchange Act is designed to protect.

CME challenges how perpetuals are classified

CME sued the CFTC in June after the regulator approved Kalshi’s BTCPERP contract as a futures product.

The cash-settled contract tracks bitcoin’s spot price, trades continuously and has no expiration date. Instead of a conventional expiry or delivery mechanism, periodic funding payments between long and short positions are designed to keep the contract’s price aligned with the underlying spot market.

CME argues that these characteristics mean the product fits the legal definition of a swap rather than a futures contract.

The exchange has also accused the CFTC of failing to adequately explain its departure from earlier enforcement actions in which crypto perpetual contracts were treated as swaps.

The distinction is significant because the legal classification determines which regulatory framework applies and how exchanges can bring these products to market.

CFTC framework extends beyond bitcoin

The CFTC’s May 29 order is not limited to bitcoin.

It also covers similarly structured perpetual contracts linked to other digital commodities with deep, active and continuous spot markets. Perpetual contracts tied to other asset classes remain subject to case-by-case review under an accompanying CFTC policy statement.

That gives the dispute implications beyond CME and Kalshi. A court ruling on the agency’s interpretation could affect how other perpetual contracts are classified and listed in U.S. derivatives markets.

Court keeps administrative record in play

The case has already moved beyond the initial dispute over the CFTC’s approval.

Last week, U.S. District Judge Colleen Kollar-Kotelly rejected the CFTC’s request to withhold the administrative record until the court ruled on the dismissal motion.

The judge said the record could contain evidence relevant to CME’s claim of competitive injury and ordered the parties to propose a combined briefing schedule by Sept. 4.

The immediate question is therefore whether CME has established sufficient injury to bring the challenge. But underlying that procedural issue is a broader regulatory question: when does a crypto perpetual become a futures contract rather than a swap under U.S. commodities law?

The court’s eventual treatment of that question could have implications for how perpetual crypto derivatives are structured and brought to market in the United States.