CME plans legal challenge over crypto perps

• CME Group plans to sue the Commodity Futures Trading Commission over the approval of perpetual futures products in the United States.
• CME chief executive Terry Duffy argues perpetual futures should be regulated as swaps under the Dodd-Frank Act rather than as standard futures contracts.
• The dispute could influence the future regulation of crypto derivatives and competition among US exchanges.

CME Group plans to challenge the Commodity Futures Trading Commission in court over the regulator's decision to approve perpetual futures products in the United States.

The dispute follows the CFTC's approval of perpetual futures contracts, including Kalshi's Bitcoin (CRYPTO:BTC) perpetual product, which allows traders to maintain positions without a contract expiry date.

“I’ve never shied away from one, and I won’t shy away from this,” said CME chief executive Terry Duffy.

Duffy argued that perpetual futures should be classified as swaps under the Dodd-Frank Act rather than as traditional futures contracts and said products linked to benchmarks covered by CME licensing agreements should be routed through CME.

The CFTC rejected the criticism, with a spokesperson reportedly describing the planned lawsuit as “frivolous”, while maintaining that approved products must comply with existing commodity and derivatives regulations.

The approval of perpetual futures has intensified competition across US derivatives markets, with investors assessing whether crypto-focused perpetual products could attract trading activity away from traditional futures exchanges.

The outcome of the case could affect how future cryptocurrency derivatives are regulated, how benchmark-linked products are approved and how new entrants compete with established exchange operators in the US market.

At the time of reporting, Bitcoin price was $64,416.20.