CFTC seeks to dismiss CME perp suit as Kalshi tops $5.5B

The CFTC asked a federal court to dismiss CME Group's lawsuit over Kalshi's Bitcoin perpetual futures, calling the claim "a tempest in a teapot" as Hyperliquid-backed groups filed an amicus brief defending the product.

"CME's alleged competitive harm is entirely self-inflicted, the result of its own refusal to list perpetual futures," the CFTC said in its motion to dismiss filed with the US District Court for the District of Columbia.

CME filed the suit in June, objecting to the CFTC's May 29 approval of Kalshi's Bitcoin perpetual futures under Regulation 40.3. The product recorded more than $5.5 billion in trading volume within its first two weeks of operation. The Healthy Perps Coalition, represented by former Solicitor General Elizabeth Prelogar of Cooley LLP, filed an amicus brief Sept. 9 supporting continued industry innovation.

The case hinges on whether perpetual futures — contracts with no expiration date — qualify as "futures" under the Commodity Exchange Act or fall under the swap framework created by the Dodd-Frank Act, as CME CEO Terry Duffy contends. CME must file its opposition to the dismissal motion by Oct. 2.

The Definitional Fight Over Perpetual Futures

CFTC Chairman Michael Selig has said current US law does not require all futures contracts to carry an expiration date, and that regulated perpetual futures in the United States would not automatically offer the extreme leverage seen on offshore platforms. Duffy has argued the opposite — that products without expiration dates should fall under the swap regulatory framework created by Dodd-Frank. The CFTC's dismissal motion noted that even if perpetual futures were reclassified as swaps, exchanges like Kalshi could still offer identical contracts under the new classification. The regulator has requested oral argument before the court.

The CFTC also argued that CME was equally positioned to list the same perpetual futures as Kalshi, pointing to the exchange's own public statements that its customers did not want the product. The regulator's position rests on the view that the Commodity Exchange Act does not mandate expiration dates for futures contracts, a reading that would open the door for other designated contract markets to list similar products without further rulemaking.

Kalshi's Push Beyond Crypto

Kalshi is planning to seek CFTC approval for perpetual futures tied to West Texas Intermediate crude oil, according to Bloomberg. The product would compete directly with CME's benchmark WTI futures franchise, which trades more than one million contracts daily. Unlike existing WTI futures that expire monthly and require traders to roll positions, a perpetual contract could theoretically be held indefinitely as long as collateral requirements are met.

Prediction market volumes reached $51 billion in 2025 and are on pace to approach $240 billion in 2026, according to industry estimates. Bernstein projects the sector could approach $1 trillion by 2030. Polymarket, Kalshi's largest rival, processed roughly $14 billion in June 2026 and has filed to register as a futures commission merchant to offer margin trading, though it faces an active CFTC investigation into its marketing practices.

Hyperliquid, one of the platforms that could be affected by the lawsuit's outcome, joined the Healthy Perps Coalition's amicus brief to defend access to regulated perpetual futures. An adverse ruling would not only restrict Kalshi's product but could reshape how crypto derivatives platforms structure their offerings in the United States, potentially pushing perpetual futures trading back toward offshore venues that operate outside CFTC oversight.

This article is for informational purposes only and does not constitute investment advice.