Chicago Mercantile Exchange has launched a legal challenge against the U.S. Commodity Futures Trading Commission, accusing the regulator of improperly allowing Kalshi and Coinbase-linked products to enter the U.S. crypto perpetual futures market
The lawsuit, filed in federal court in Washington, challenges the CFTC’s approval of KalshiEX LLC’s bitcoin perpetual futures contract and a related regulatory position that could allow Coinbase customers in the United States to access similar products through overseas futures channels.
At the center of the case is the CFTC’s May 29 decision approving Kalshi’s BTCPERP contract, a product tied to the spot price of bitcoin. Kalshi submitted the contract under the agency’s futures review process, and the commission cleared it one day later.
CME argues that the agency moved with unusual speed and failed to apply the tougher regulatory review required for products that, in the exchange’s view, behave more like swaps than conventional futures.
No expiry, high stakes: The product behind the lawsuit
Perpetual futures, often called “perps” in crypto markets, differ from traditional futures because they do not have a fixed expiration date. Traders can keep positions open indefinitely, while funding payments between long and short positions help keep the contract price close to the underlying asset.
The structure has made the product one of the most heavily traded instruments in global digital-asset markets, particularly on offshore exchanges where high leverage and rapid liquidations are common.
That popularity has also turned perpetual futures into a key prize for U.S. trading platforms seeking to compete with overseas crypto venues.
CME’s complaint argues that allowing these products through the futures framework could weaken protections built into U.S. derivatives law. The exchange says the risks are not limited to professional traders, warning that retail users may not fully understand the impact of leverage, funding costs and sudden liquidations in markets that can move sharply within minutes.
Kalshi and Coinbase become the test cases
Kalshi and Coinbase are not defendants in the case, but both are central to the fight. Kalshi, a federally regulated exchange known for event contracts, received the CFTC’s green light to list a bitcoin perpetual futures product in the United States.
Coinbase, meanwhile, has been pushing further into crypto derivatives, with part of that expansion linked to overseas perpetual futures access.
The CFTC has framed its recent decisions as part of an effort to bring crypto trading activity under regulated supervision instead of leaving it concentrated on offshore platforms.
CME sees it differently, arguing that the CFTC bent existing rules to fit a product outside the traditional futures framework, while the rapid approval gave the market little room to examine the risks.
What the case could mean for crypto’s U.S. expansion
The case could become an important test of how much flexibility the CFTC has as it tries to modernize derivatives regulation for digital assets. A ruling against the agency could slow the rollout of perpetual futures in the United States and force regulators to treat them under stricter rules.
For CME, the dispute is a fight over the future of U.S. derivatives oversight, while for crypto firms, it is a crucial test of their path into U.S. perpetual futures trading.
