CME Group filed suit against the CFTC on Thursday, claiming the agency exceeded its authority when it approved Kalshi's first U.S. perpetual futures contract. The lawsuit centers on a fundamental question: whether perpetual futures belong under the CFTC's jurisdiction as futures at all, or whether they should be treated differently.
The dispute turns on regulatory classification. CME argues that Kalshi's perpetuals are economically closer to swaps than to conventional futures, which would place them in a different regulatory bucket with different rules. Under CFTC regulations, swaps face stricter position limits and mandatory clearing requirements in certain cases. The distinction matters because it determines what safeguards apply and who can trade them.
Kalshi won CFTC approval for its perpetuals contract in May under Part 32 of the CFTC's regulations, a framework designed for retail digital assets. CME, which operates the largest futures exchange in the U.S., has long dominance in the perpetuals space through its conventional futures offerings. The lawsuit signals CME's intent to preserve that regulatory advantage.
The case hinges on whether perpetuals function as futures (contracts obligating delivery or cash settlement at a future date) or swaps (bilateral agreements where parties exchange cash flows based on an underlying asset). Perpetuals have no expiration date and use continuous funding payments to keep the contract price aligned with the spot market. That structure is unlike traditional futures, which settle on fixed dates.
Regulators and market participants have debated the perpetuals classification for years. The CFTC's decision to permit Kalshi to launch was effectively a choice to treat perpetuals as futures falling under Part 32, which carries lighter requirements than swap rules. CME's challenge suggests the agency may have applied the wrong standard or overstepped its power to make that call.
The timing adds pressure on the CFTC. The agency is already facing scrutiny over how broadly it has interpreted its authority under the Commodity Exchange Act. A court ruling against the CFTC could force a review of other recent approvals or require Congress to clarify which regulator—the CFTC or the SEC—should oversee different classes of digital asset derivatives.
Kalshi has not yet responded publicly to the suit. The exchange will likely argue that its product meets the legal test for a futures contract and that the CFTC properly exercised its discretion in approving it under Part 32. The case is expected to move through federal court over the coming months.