The CFTC says CME cannot be injured by a contract it refuses to list

What happened

The Commodity Futures Trading Commission and its chairman Michael Selig moved on 2 September to dismiss CME Group's suit against them, filing under Rules 12(b)(1) and 12(b)(6) in the US District Court for the District of Columbia and requesting an oral hearing. CME sued on 18 June over the Commission's order of 29 May approving Kalshi's bitcoin perpetual futures and the policy statement at 91 Fed. Reg. 33,160 that followed, arguing the contracts should have been classified as swaps rather than futures. Its complaint, as quoted by The Block, said that 'by authorizing Kalshi and others to enter the derivatives marketplace by listing similar cryptocurrency perpetuals as futures, the CFTC ushered new entrants into CME's retail futures market that seek to compete with CME for retail customers'. The 30 page memorandum in support opens: 'This lawsuit is much ado about nothing.' Its argument is that CME has alleged no injury it can bring to court, and it makes the case out of CME's own material. On the earnings call of 22 July the exchange's chairman and chief executive said perpetual futures 'do not appeal to our core customers', that they 'are in no way substitutes for the institutional hedging tools that these customers rely on', that 'Our crypto futures volume is up over 7-fold in the past 3 years, despite the existence of crypto perpetuals', and that 'We have the full technical and operational capabilities to launch perpetual futures. In fact, we have contract specifications and are prepared to bring these products to market should evolving demand or structural shifts make it appropriate to do so. However, we have not heard demand from our customers for these products.' Beside that the Commission reproduces two tables from CME's own monthly volume files: against May 2026, the month of the order, June bitcoin futures were up 12.6 per cent and micro bitcoin up 44.7, and August was still up 15.3 and 23.0, with ether up 13.0 then 5.2 and micro ether 30.6 then 7.1. 'Those injuries are entirely self-inflicted and based on CME's refusal to list perpetual futures for trading,' the memorandum says, since the order states that 'any CFTC-registered exchange can list perpetual futures on digital assets'. It adds a redressability argument, that reclassifying the contracts as swaps would simply let Kalshi list them as swaps, and a second ground: that a board of trade complaining about how a rival's contract is labelled falls outside the zone of interests of the Commodity Exchange Act, whose purpose includes 'responsible innovation and fair competition among boards of trade' and which CME's suit 'turns on its head'. On 4 September the parties filed a joint proposed briefing schedule recording that they disagree about whether the Commission may take discovery from CME on standing; the Commission has agreed to seek the court's leave first, by 11 September. CME's opposition is due 2 October, cross-motions for summary judgment on 20 November and amicus briefs on 4 December.

Why it matters

The classification fight underneath this case decides what a perpetual is in American law, and the Commission has found a way to avoid having it. If CME lacks standing, no court reaches the question whether an expiryless contract with periodic funding payments is a future or a swap, the 29 May order stands, and the policy statement stays the operative text for every designated contract market. That matters well beyond Kalshi. Coinbase Derivatives holds a no-action position for the same product, Coinbase filed on 1 September to seek a route to equity perpetuals, and Kalshi is reported to be seeking approval for perpetuals on crude oil; every one of those sits on the same classification. This desk was already reading the same docket on 18 August, when Kalshi filed for perpetuals on the S&P 500 and on copper and named an oracle network as its price source. The evidentiary move is the part worth studying. A regulator has gone to a court with its supervised entity's earnings script and its published volume files and argued that the firm's public statements to investors contradict its pleadings. It is the mirror image of the usual posture, in which the agency has the private information and the firm has the public one, and it works only because an exchange has to talk to shareholders about the same products it litigates over. The zone of interests argument is the more consequential of the two if it lands. Section 7a-2(c) lets a designated contract market self-certify a contract and list it the next day unless the Commission intervenes, and the Commission's reading is that letting one exchange sue over another's certification would defeat that design. A court that agreed would close off competitor litigation as a route to slowing a rival's product, which is currently the only route there is.

What is not settled

Nothing is decided and the schedule runs into December. The discovery fight is the live question and it is unusual: the Commission wants to examine CME about its own standing, CME reserves all rights, and the court will rule on leave before the merits of the motion are briefed. If discovery is allowed, an exchange's internal assessment of whether perpetual futures threaten its business becomes evidence in a case it brought. Neither the memorandum nor any report read here says what CME will argue in reply, and the exchange has not answered the point that it could list the contracts itself. The Commission's volume tables are also not the only reading available: they show total crypto futures volume rising in the three months after the order, which is consistent both with no competitive harm and with a rising market in which CME's share fell, and nothing in the filing addresses share. The Commission's own position on the merits is stated in a single clause, 'CME is wrong on the merits, perpetual futures are futures', and is not argued. And the court has already signalled it will look outside the pleadings on standing, in the order of 27 August denying the Commission's motion to be excused from Local Civil Rule 7(n), which is why both sides are citing public documents at this stage.