Summary
- Coinbase, Kraken, Kalshi, and three other trading firms seek court permission to defend the CFTC’s approval of equity perpetual futures.
- Capital Markets Alliance challenges the CFTC’s authority, arguing that equity perpetual contracts fall under SEC jurisdiction as security-based swaps instead.
- Coinbase, Kalshi, and Payward secured regulatory approval for equity perpetual applications, while industry leaders advocate broader American investor market access.
Coinbase, Kraken, and Kalshi have joined other trading firms in defending the Commodity Futures Trading Commission’s approval of equity perpetual futures. Their intervention follows a federal lawsuit challenging the regulator’s authority over derivatives linked to individual American stocks.
According to a Monday court filing, six companies requested permission to submit an amicus brief supporting the CFTC. The group includes Coinbase, Kalshi, Kraken parent Payward, DRW Holdings, Jump Trading, and Paradigm.
Their request responds to a lawsuit filed by the Capital Markets Alliance, whose members include Cboe and Citadel Securities. The association wants federal judges to overturn the CFTC’s approval of single-stock perpetual contracts.
Crypto Firms Reject Claims That CFTC Exceeded Its Regulatory Authority
The dispute centers on whether perpetual futures linked to individual stocks qualify as security futures or security-based swaps. Unlike traditional futures contracts, perpetual derivatives lack expiration dates and allow investors to speculate without owning underlying shares.
CMA argues that these characteristics place equity perpetuals under SEC jurisdiction rather than the CFTC’s regulatory authority. Consequently, the association maintains that CFTC-regulated exchanges cannot legally list these products.
The six companies reject that interpretation, arguing that existing legislation supports the regulator’s decision. According to their filing, the CFTC and SEC jointly requested public comments concerning the classification of perpetual contracts. This consultation supports their argument that both agencies participated in the regulatory process.
Coinbase Pushes for U.S. Access to Global Equity Perpetual Markets
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Coinbase Vice Chairman Ryan VanGrack defended the approvals, emphasizing that international markets already offer equity perpetual contracts. According to VanGrack, American investors deserve access to similar products under federal consumer protections and joint regulatory oversight.
Meanwhile, Coinbase, Kalshi, and Payward received deemed approval for their equity perpetual applications on November 2. Their involvement strengthens the industry’s legal defense against CMA’s challenge to the regulator’s authority.
The court must determine whether to accept the companies’ proposed brief before considering their arguments. The lawsuit could determine how American regulators classify equity perpetual contracts and which federally supervised exchanges can legally offer them.
