Perpetual Futures Battle Heats Up Between CFTC and CME Group

A high-stakes legal battle between the Commodity Futures Trading Commission (CFTC) and CME Group is testing the future of U.S. crypto derivatives.

The dispute revolves around the classification of perpetual futures, which are a type of derivative contract that does not expire on a specific date like traditional futures contracts do.

CME argues that perpetuals should be considered swaps, not futures, under the Dodd-Frank Act, citing their recurring funding rate payments as evidence. If they are deemed swaps, they would face stricter clearing and collateral requirements.

The CFTC had previously approved Kalshi's Bitcoin perpetual futures using a self-certification process, which CME claims was an improper shortcut.