Coinbase and Kalshi have backed the US Commodity Futures Trading Commission (CFTC) in a lawsuit over stock perpetual futures, contracts that let traders speculate on individual shares without an expiration date. The companies, joined by Payward, DRW Holdings, Jump Trading and Paradigm Operations, asked a federal court on Monday to accept a proposed amicus brief, according to a copy shared by Coinbase legal representative Molly Abraham.
The dispute follows the CFTC’s November 3 decision to let single-stock perpetuals trade on US-regulated exchanges. The Capital Markets Alliance Association (CMAA), whose members include Cboe and Citadel Securities, sued, arguing these contracts are security-based swaps under SEC oversight. Judge Valerie Caproni said the CMAA was likely to succeed in arguing the CFTC exceeded its statutory authority, but she denied its request for a temporary restraining order, citing a lack of imminent, irreparable harm. The CFTC’s trading approvals remain in place while the case proceeds.
The backers argue that a fixed expiration date is not required for a security future, which falls under joint CFTC and SEC oversight. The case could determine whether US exchanges can offer retail traders contracts that track individual stocks without expiring.
CryptoLaunchHub Takeaway
The filing puts crypto firms and traditional market groups on opposite sides of a question that could shape how stock-linked derivatives reach US retail traders. Because the judge’s view is preliminary, readers should watch the CMAA’s reply and any injunction ruling before drawing conclusions.
Source: Cointelegraph