CME Group filed a lawsuit against the Commodity Futures Trading Commission (CFTC) on Thursday, alleging that the agency improperly approved Kalshi's first U.S. perpetual futures product. CME argues that the CFTC failed to consider whether these products are actually 'swaps' under the Dodd-Frank Act rather than 'futures,' and that the approval process violated procedural requirements. The lawsuit asks a court to vacate the approval and self-certified products. This legal action is unusual for an established firm like CME suing its primary regulator. Perpetual futures, or perps, are a relatively new product, and the crypto industry is a major participant. CME claims that perps harm its own long-dated futures products. The CFTC granted Kalshi's application in late May, and on the same day, issued a no-action letter to Coinbase, potentially allowing it to list perps via an offshore intermediary. Legal experts note that 'future' is not defined in Dodd-Frank, while 'swap' is, giving the CFTC discretion to categorize novel products. CME's lawsuit argues that the lack of an expiry date makes Kalshi's product a swap, not a future.

Key facts

• CME sued CFTC over approval of Kalshi's perpetual futures.
• CME argues perps are swaps, not futures, under Dodd-Frank.
• CFTC allegedly rubberstamped Kalshi's application without proper analysis.
• Legal experts note no clear precedent on perpetual futures classification.
• CFTC also issued no-action letter to Coinbase on perps same day.

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