SEC and CFTC Seek Public Comment on Crypto Derivatives Rules Amid CME Lawsuit

The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly requested public feedback on how digital asset derivatives should be classified, regulated, and supervised.

This move comes less than 24 hours after CME Group announced plans to sue the CFTC over its approval of Bitcoin perpetual futures for Kalshi. CME CEO Terry Duffy claims that these contracts do not meet the legal definition of futures under Dodd-Frank and should instead be classified as swaps, which are subject to different regulations.

The SEC and CFTC want public input on whether current definitions created under Title VII of the Dodd-Frank Act still properly reflect modern financial products and trading practices. They are seeking feedback on several key areas, including the definitions of swaps, security-based swaps, mixed swaps, event-based contracts, and emerging products.

SEC Chairman Paul Atkins stated that clarification is long overdue on Title VII definitional issues, including event-based products. CFTC Chairman Mike Selig acknowledged that uncertainty has become a problem for both regulators and market participants.

The public comment period will remain open for 60 days after publication in the Federal Register.