The U.S. Commodity Futures Trading Commission (CFTC) has asked a federal judge to dismiss CME’s challenge to its approval of cryptocurrency perpetual futures, arguing the derivatives exchange cannot show that it has been harmed.
The regulator called the dispute “much ado about nothing” and said CME lacks constitutional standing because it has not alleged a concrete financial loss, in a motion filed Wednesday.
The CFTC said the order CME is challenging allows any registered designated contract market, including CME, to list similarly structured products.
CME has also publicly said its customers have not asked for perpetual futures. Any harm caused by its decision not to offer the contracts is therefore self-inflicted, the CFTC argued.
A ruling in CME’s favor would not remove the competing products from the market, according to the agency. Kalshi and other designated contract markets could continue offering them as swaps, meaning reclassifying the contracts would not remedy CME’s alleged competitive injury.
The CFTC also said CME’s effort to protect itself from competition falls outside the interests the Commodity Exchange Act was designed to protect.
CME sued the regulator in June after the CFTC approved Kalshi’s BTCPERP contract as a futures contract. The cash-settled product tracks bitcoin’s spot price, trades around the clock and has no expiration date. Periodic payments between long and short positions are used to keep its price close to spot via a funding rate.
The May 29 order also covers similarly structured perpetual contracts tied to other digital commodities with deep, active and continuous spot markets. Perpetuals linked to other asset classes remain subject to case-by-case review under an accompanying policy statement.
CME argues that contracts without an expiration date or delivery obligation, and which exchange funding payments between traders, meet the legal definition of swaps rather than futures.
It also accused the CFTC of failing to explain a departure from earlier enforcement cases in which it classified crypto perpetuals as swaps.
U.S. District Judge Colleen Kollar-Kotelly last week rejected the CFTC’s request to withhold the administrative record until its dismissal motion was decided, saying the material could contain evidence of CME’s claimed competitive injury. She ordered the parties to propose a combined briefing schedule by Sept. 4.