SEC and CFTC Weigh In on Derivatives Definitions, Crypto Markets on High Alert

The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly requested public comment on derivatives product definitions, sparking debate over how to classify modern derivatives that blur lines between futures, swaps, event contracts, and crypto-native perpetuals.

The request focuses on areas including swaps, security-based swaps, mixed swaps, novel products, emerging products, and alternative compliance. The agencies are seeking feedback for 60 days following publication in the Federal Register.

This development comes as CME Group has filed a lawsuit challenging the CFTC's approval of perpetual futures contracts for event-contract platforms, including Kalshi and Coinbase. CME argues that contracts without an expiration date and with periodic funding mechanics should be viewed as swaps rather than ordinary futures.