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The U.S. Commodity Futures Trading Commission (CFTC) faces a federal lawsuit after approving perpetual futures tied to individual stocks.
The Capital Markets Alliance filed the lawsuit on November 3, challenging the regulator's decision to permit stock perpetual futures on U.S. exchanges. The group, backed by Cboe and Citadel Securities, argues that the contracts fall under Securities and Exchange Commission (SEC) oversight.
The legal challenge follows the CFTC's earlier approval of Bitcoin perpetual futures, which also faced opposition from established financial firms.
The Capital Markets Alliance filed its complaint in the U.S. District Court for the Southern District of New York. Its members include Cboe, Citadel Securities and Healthy Markets Association. The group wants the court to overturn the approvals and prevent trading while litigation continues.
In its November 3 statement, the alliance argued that the products qualify as security-based swaps under SEC jurisdiction. It also accused the CFTC of violating the Administrative Procedure Act.
The complaint claims the regulator failed to explain its decision or adequately consider investor risks. The alliance also questioned the CFTC's departure from its earlier treatment of perpetual derivatives.
Meanwhile, Cboe CEO Craig Donohue defended the legal action, arguing that securities-linked products require established investor protections.
“Investors deserve the specific protections Congress established for securities markets,” Donohue said in a company statement.
CFTC Chairman Michael Selig announced on Tuesday that eligible U.S. exchanges could begin offering single-stock perpetual futures. The contracts received approval under Commission Regulation 40.3.
Selig said the products qualify as security futures under the Commodity Futures Modernization Act of 2000. Exchanges must hold the required registrations with both the CFTC and SEC.
The chairman also linked the decision to the agency's earlier approval of Bitcoin perpetual futures in May. He argued that regulated domestic markets would provide an alternative to “offshore, and often unregulated, venues.”
The CFTC rejected the criticism surrounding its decision. An agency spokesperson described the lawsuit as an attempt to interfere with regulated markets.
“Our markets should be governed by law, not litigation campaigns intended to block innovation,” the spokesperson said.
Perpetual futures allow traders to speculate on asset prices without owning the underlying assets. Unlike traditional futures contracts, they have no fixed expiration date. Traders can maintain positions while meeting margin and funding requirements.
The CFTC previously approved Bitcoin perpetual futures for Kalshi in May. CME Group later challenged the approval, arguing that contracts without expiration dates should face different regulatory treatment. The regulator subsequently sought dismissal of that lawsuit.
Meanwhile, Coinbase Derivatives, Kalshi and Bitnomial have pursued stock-linked perpetual contracts for U.S. traders. Their proposals extend a trading model already established across cryptocurrency markets.
The latest lawsuit now challenges the legal classification supporting these products. The Capital Markets Alliance wants the court to declare the contracts security-based swaps and suspend the contested approvals.
As of November 4, the available court records showed the complaint and a request for emergency relief, without a final ruling on the dispute.
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