The U.S. Commodity Futures Trading Commission (CFTC) has challenged the Chicago Mercantile Exchange’s (CME) legal standing in its lawsuit over the approval of perpetual futures products for virtual assets. The CFTC argues that CME must demonstrate actual harm, not just increased competition.
On Monday, CoinDesk reported that the CFTC submitted this opinion to the court on October 16. This follows their previous request last month to dismiss CME’s lawsuit entirely.
CME initiated legal action in May after the CFTC approved Kalshi’s Bitcoin perpetual futures product. The exchange contends that this product should be classified as a swap contract, not a futures contract.
Perpetual futures allow investors to speculate on future asset prices using leverage, without a fixed expiration date. While the CFTC maintains it will regulate these products as futures on a case-by-case basis, CME argues their lack of expiration warrants classification as swaps, subject to different regulations.
The CFTC rebuts CME’s claims, asserting that the exchange has not suffered damages from the product approval. In fact, they point out that CME’s virtual asset futures trading volume has increased.
The Commission also argues that CME cannot maintain one position in court while presenting a different stance to investors during earnings calls.
However, Jarrett Seiberg, a policy analyst at TD Cowen, expressed concerns about the growing perpetual futures market during the ongoing litigation. He cautioned that if this growth continues, reversing the market could become increasingly complex, even if CME ultimately prevails in court.