CME Sues CFTC Over Approval of Perpetual Futures for Kalshi and Coinbase

The Chicago Mercantile Exchange (CME) has sued the US Commodity Futures Trading Commission (CFTC) over its decision to allow prediction markets platform Kalshi and cryptocurrency exchange Coinbase to list perpetual futures. The CME claims that these contracts are swaps under the 2010 Dodd-Frank financial reforms, which the regulator had previously accepted.

The CFTC approved perpetual futures for Kalshi on May 29, allowing it to list a bitcoin perpetual future, while also issuing a policy statement permitting similar contracts. Coinbase was also given permission to offer foreign perpetual futures pegged to cryptocurrencies to US investors.

Kalshi spokesperson Elisabeth Diana said that the lawsuit is 'not about the law, it's about the fear of competition,' while Faryar Shirzad, Coinbase's chief policy officer, stated that 'competition and innovation are the bedrock of vibrant financial markets' and commended the CFTC for onshoring modern contract structures.

The lawsuit seeks to void the CFTC's approval for Kalshi to list perpetual futures and its policy statement allowing similar contracts. The CME claims that this decision inflicts 'textbook competitive injury' by letting Kalshi, Coinbase, and others compete for its retail customers.