Perpetual Contracts Update: CME Takes CFTC To Court

Key Takeaways

• CME has sued the CFTC in federal court, seeking to vacate the CFTC’s order approving Kalshi's bitcoin perpetual contract (BTCPERP) as a futures product.
• A key central legal question is whether perpetual contracts (which have no fixed delivery expiration date) are futures or swaps, a distinction with major regulatory and tax consequences.
• Swaps tading can carry significantly heavier regulatory burdens than futures trading, including mandatory swap dealer registration, comprehensive reporting obligations, and stricter margin requirements.
• CME alleges the CFTC violated the Administrative Procedure Act by reversing established policy without sufficient explanation, effectively rubber-stamping Kalshi's arguments.
• The CFTC's order and accompanying policy statement may allow other exchanges to self-certify similar digital commodities perpetuals as futures rather than swaps.

This is intended to serve as an update to our previous OnPoint dated June 9, 2026, titled “CFTC Takes Historic Steps to Bring Digital Asset Perpetual Contracts Onshore” (the “Perpetuals OnPoint”). Capitalized terms used but not defined herein have the meanings given to such terms in the Perpetuals OnPoint.

On June 18, 2026, the Chicago Mercantile Exchange (“CME”) filed suit in Washington, DC District Court against Chairman Selig in his capacity as Chairman of the CFTC and the CFTC over the CFTC’s order approving the listing of Kalshi’s BTCPERP Contract as a futures contract.¹ CME argued in its complaint (the “Complaint”) that the Order failed to thoroughly assess whether perpetual contracts should be characterized as futures or swaps. As noted in the Perpetuals OnPoint, futures contracts are generally subject to a less burdensome regulatory regime than swaps, as well as more favorable tax treatment. Any person who makes a market in or regularly trades swaps above a de minimis threshold is required to register with the CFTC as a swap dealer, thereby becoming subject to capital, business conduct, recordkeeping and supervisory requirements that persons engaging in analogous activity in the futures space are not subject to. Swaps are subject to more onerous margin and collateral requirements than futures² , and unlike futures participants, swap participants are subject to a comprehensive data reporting regime³. The Internal Revenue Code also permits taxpayers to treat a portion of gain or loss on a futures contract as long-term capital gain or loss, and to carry back net losses on such contracts to each of the three taxable years preceding the loss year⁴.

According to CME, the Order did not address any of the comments the CFTC received in response to policy questions relating to perpetual contracts that it issued in April 2025. In addition to never issuing a final rule incorporating the feedback it received, in CME’s view, the CFTC departed from Congress’ intent under the Dodd-Frank Act and the CFTC’s prior policy of regulating perpetual contracts as swaps, and the Order did not acknowledge or explain this reversal.⁵ CME argued that a perpetual contract (i) provides for the exchange of payments (funding rate payments) based on the commodity's value; (ii) transfers price risk between parties; and (iii) does so without conveying any ownership interest in the underlying asset. Notably, according to CME, there is no set future delivery, the defining feature of futures. 

CME posits that the CFTC – currently acting as a commission of one – engaged in “arbitrary and capricious” behavior, violating the Administrative Procedures Act, by delegating its responsibility to Kalshi (by “rubberstamping” Kalshi’s own arguments in the Order). CME also asserted that the Policy Statement accompanying the Order authorizes DCMs to improperly self-certify similar digital commodity perpetual contracts as futures.⁶ CME asserted that Kalshi’s BTCPERP Contract (as well as the additional cryptocurrency perpetual contracts that Kalshi has self-certified since the issuance of the Order) will unlawfully compete with CME’s retail-oriented digital commodity futures products, resulting in significant competitive losses (within one week of launch, Kalshi’s perpetuals crossed USD 1 billion in trading volume across more than a dozen such contracts) to CME.⁷ As such, CME has requested that the district court vacate the Order and Policy Statement and declare that the BTCPERP Contract and similar digital commodity contracts are swaps under the Commodity Exchange Act.⁸ The Complaint is a swift and bold move by a critical domestic self-regulatory organization against its regulator, and its outcome will have significant economic implications. 

Footnotes

1. Chicago Merchantile Exchange Inc. v. CFTC, 1:26-cv-02157.

2. CFTC Regulation 39.13(g)(2); Commodity Exchange Act section 4d(a), 6d(f)(2).

3. CFTC Regulation Parts 43, 45.

4. Internal Revenue Code Sections 1256, 1212(c).

5. Chicago Mercantile Exchange Inc. v. CFTC at 2-4.

6. Id. at 4.

7. Id. at 4.

8. Id. at 42.