CFTC seeks to dismiss CME's Kalshi lawsuit over bitcoin perpetual futures

The Commodity Futures Trading Commission asked a federal court on Sept. 2 to throw out CME Group’s challenge to the agency’s approval of KalshiEX’s BTCPERP contract. The motion, filed in the U.S. District Court for the District of Columbia, came after CME sued on June 18 over the commission’s May 29 approval.

BTCPERP is a cash-settled perpetual futures contract tied to bitcoin’s spot price in U.S. dollars through the CF Benchmarks Bitcoin Real Time Index. Under the approval order, it trades in units of one ten-thousandth of one bitcoin, runs 24 hours a day, seven days a week, and has no fixed expiration date.

Positions are marked to market continuously, and the contract uses a funding mechanism in which long and short holders exchange payments based on the gap between the contract’s mark price and the reference price. Kalshi told the commission that the structure is meant to keep the contract aligned with spot bitcoin and to concentrate liquidity in one instrument rather than across a series of expiries.

In its approval order, the CFTC said the contract complied with the Commodity Exchange Act and Commission regulations, including the core principles that apply to designated contract markets. The commission issued the order under Section 5c(c)(4) of the act and Regulation 40.3 after reviewing Kalshi’s submission.

The CFTC has also framed the approval as part of a broader policy shift. In a June 3 Federal Register statement, it said perpetual contracts have become a major form of crypto derivatives trading globally and that much of that activity has taken place on offshore venues. The agency said perpetual contracts referencing assets not covered by the bitcoin order should be submitted for review under Regulation 40.3.

The September 2 motion argues that CME lacks standing because it could seek approval to offer similar perpetual futures itself. The commission also said CME had not shown a real competitive injury, pointing to CME trading data that showed bitcoin and ether futures volumes in June and August were higher than in May, the month Kalshi’s contract was approved.

The filing did not ask the court to rule on the deeper classification fight over whether crypto perpetuals should be treated as swaps or futures. The commission said that even if perpetual contracts were reclassified as swaps, other designated contract markets could still offer them.

CME’s response is due Oct. 2. The CFTC has requested oral argument, though none had been scheduled when the motion was reported. If the case is dismissed on standing or other procedural grounds, the Kalshi approval and the current policy would remain in place, while the swap-versus-futures question would go unanswered.