CME Group, under the leadership of outgoing CEO Terrence Duffy, is preparing to sue the Commodity Futures Trading Commission (CFTC) over its recent approval of perpetual futures, arguing these instruments should be classified as ‘swaps’ under the Dodd-Frank Act.
This legal challenge arises after the CFTC allowed platforms like Kalshi to offer these non-expiring crypto derivatives in the U.S. market, a decision CME believes necessitates different regulatory oversight due to their inherent nature and CME’s existing benchmark licensing agreements.
In a significant move poised to ignite a major regulatory battle, Terrence Duffy, the outgoing Chief Executive Officer of CME Group, announced on CNBC's "Fast Money" that the leading derivatives exchange operator is preparing to sue the Commodity Futures Trading Commission (CFTC).
Terry Duffy, CEO of CME Group Inc., pictured speaking during the Piper Sandler Global Exchange and FinTech Conference in New York City, U.S., on June 5, 2025. Adam Gray | Reuters
The impending lawsuit challenges the CFTC's recent decision to approve perpetual futures for trading in the U.S. Duffy contends that these contracts, which unlike traditional futures lack an expiration date, should be classified as 'swaps' under the Dodd-Frank Act. This reclassification would subject them to a different regulatory framework, a key point in CME's legal argument.
The CFTC's approval, granted to prediction market platform Kalshi in late May, marked the debut of bitcoin perpetual futures, or "perps," in the American market. While already popular internationally, their U.S. entry has been a closely watched development, with Kalshi quickly expanding its offerings to include other cryptocurrencies.
Duffy highlighted CME Group's exclusive licensing agreements for all underlying benchmarks. "All of these would have to go through CME regardless of the perpetual," he asserted on "Fast Money." He elaborated, "They would have to list them as swaps, if that's the way that it came out," underscoring CME's stance on proper regulatory oversight.
Despite being slated to step down as CEO in March 2027, Duffy revealed that he and the CME board have been meticulously planning this legal action for the past eight months. "I'm always up for a good battle," he declared, adding, "I've never shied away from one, and I won't shy away from this." He confirmed that the lawsuit would be filed on Thursday, signaling CME's unwavering commitment to the fight.
The CFTC did not immediately respond to requests for comment regarding CME's announced litigation.
Earlier in the week, CFTC Chair Michael Selig defended his agency's approval of perpetual futures during an appearance on CNBC's "Fast Money." Selig stated, "It's time to approve regulated futures contracts that have no expiration date," emphasizing the agency's intent to ensure the product's availability while maintaining robust regulation in the U.S.
Disclosure: CNBC and Kalshi maintain a commercial relationship that encompasses customer acquisition and a minority investment.
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