CME sues CFTC over approval of perpetual futures for Kalshi, Coinbase

The Chicago Mercantile Exchange filed suit in federal court in Washington on Thursday against the U.S. Commodity Futures Trading Commission and its chairman, Michael Selig, over a decision made just three weeks earlier. On May 29, the CFTC had approved the prediction markets platform Kalshi to list a bitcoin perpetual future contract. The same day, the agency issued a policy statement signaling it would not object if Coinbase, the major cryptocurrency exchange, allowed American investors to access its foreign perpetual futures pegged to digital assets. CME now wants that approval voided.

Perpetual futures are derivatives that track the price of an underlying asset—in this case, cryptocurrencies—and they work differently from traditional futures contracts. They have no expiration date, meaning a trader can hold a position indefinitely. They also allow investors to use substantial leverage, amplifying both potential gains and losses. The contracts can qualify for favorable tax treatment, which adds to their appeal. These characteristics have made them increasingly popular. Last year, perpetual futures trading volume grew 29 percent, reaching $61.7 trillion globally, according to market data from CryptoQuant, as traders hunted for new ways to capitalize on cryptocurrency price swings.

CME's complaint centers on what it calls "textbook competitive injury." The exchange argues that by allowing Kalshi, Coinbase, and others to offer perpetual futures, the CFTC has opened the door for these competitors to pursue CME's retail customer base. The lawsuit does not name Kalshi or Coinbase as defendants—only the CFTC and Selig.

The CFTC pushed back swiftly. A spokesperson for the agency dismissed the lawsuit as "frivolous" and reframed the dispute as a matter of incumbents resisting change. "Rather than compete in the marketplace, the CME has decided to undertake lawfare against the agency and the Trump Administration's pro-innovation agenda," the spokesperson said. "Incumbents fear the future and having to compete on a level playing field." Kalshi's Elisabeth Diana echoed that framing: "This isn't about the law, it's about the fear of competition."

Coinbase's chief policy officer, Faryar Shirzad, positioned the CFTC's move as a win for American markets. "Competition and innovation are the bedrock of vibrant financial markets and we commend the CFTC for onshoring modern contract structures that benefit American investors," he said. The language of "onshoring" reflects a broader policy goal: making the United States the dominant hub for cryptocurrency trading and innovation, a priority the Trump administration has embraced.

Selig, who authored a May 29 editorial in CoinDesk defending the decision, framed it as fulfilling the CFTC's "statutory obligation to promote responsible innovation." He is currently the only commissioner serving on the CFTC, which normally operates with five. That structural reality—a single commissioner making major policy decisions—adds another layer to the dispute, though it has not been the focus of CME's legal challenge.

The CFTC is already entangled in multiple lawsuits with U.S. states over prediction markets, which allow people to wager on the outcomes of events ranging from sports to elections. Many states view such wagers as gambling and have sought to restrict them. The perpetual futures approval sits within this broader tension between federal regulators eager to modernize cryptocurrency markets and traditional gatekeepers—both state authorities and incumbent exchanges—concerned about the pace and scope of change. CME's lawsuit is the first major legal test of whether the CFTC's recent approvals will hold.