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Major cryptocurrency firms are supporting the US Commodity Futures Trading Commission (CFTC) in two legal disputes concerning perpetual futures. The cases could reshape how cryptocurrency and stock-linked derivatives are regulated in the United States.
Companies including Coinbase, Kraken and Kalshi are challenging traditional financial institutions seeking restrictions on these products.
According to CoinDesk, Coinbase, Kraken and Kalshi have backed the CFTC in a dispute over single-stock perpetual futures, joining other industry participants including Paradigm, DRW Holdings and Jump Trading.
The Capital Markets Alliance, backed by Citadel Securities, Cboe and other financial firms, filed a lawsuit seeking emergency restrictions on these contracts. Perpetual futures allow traders to speculate on asset prices without fixed expiration dates.
The alliance argues that stock-linked perpetual contracts qualify as security-based swaps, placing them under Securities and Exchange Commission (SEC) jurisdiction rather than exclusive CFTC oversight.
Crypto firms disagree, maintaining that the instruments should be classified as security futures.
In an amicus brief filed in the US District Court for the Southern District of New York, cryptocurrency companies argued that traditional financial institutions could introduce competing perpetual products instead of blocking them.
The filing stated that established firms "could offer that better product themselves; instead, CMAA sued and sought emergency relief to keep it off the market."
The companies further asserted: "The question, then, is not whether equity perpetuals resemble security-based swaps, but whether they are security futures and they are."
They maintained that both the CFTC and SEC had participated in establishing the regulatory treatment of these instruments.
A separate lawsuit involving CME Group challenges the CFTC's treatment of cryptocurrency perpetual futures. CME argues these contracts should be classified as swaps rather than futures, requiring different regulatory requirements even though the CFTC would retain jurisdiction.
According to CoinDesk, the regulator has requested dismissal of CME's lawsuit, while judicial proceedings remain unresolved.
In the stock-perpetuals dispute, a federal judge initially permitted trading to continue but indicated that the jurisdictional challenge warranted consideration.
Under President Donald Trump's administration, regulators have sought to bring offshore perpetual futures activity into regulated US markets.
The outcomes could determine which agencies supervise these products and influence competition between cryptocurrency platforms and established financial exchanges.
Also Read: Coinbase, Kalshi Lead Six Firms Backing CFTC in Stock Perpetual Futures Lawsuit