Coinbase, Kalshi and trading firms back CFTC in legal battle over single-stock perpetual futures
Six crypto and trading firms moved to file an amicus brief defending the Commodity Futures Trading Commission's authority over single-stock perpetual futures against a lawsuit brought by traditional market operators.
A coalition of six prominent crypto and trading firms—Coinbase, Kalshi, Kraken parent Payward, DRW Holdings, Jump Trading, and Paradigm—asked a federal court for permission to file an amicus brief defending the Commodity Futures Trading Commission's authority to regulate single-stock perpetual futures in the United States, according to court documents and reporting by Unchained and The Block.[2][4][5][1]
The brief was submitted on November 9 in the U.S. District Court for the Southern District of New York in Capital Markets Alliance Association v. Commodity Futures Trading Commission, et al. The filing supports the CFTC's opposition to a preliminary injunction sought by the Capital Markets Alliance Association, a trade group representing major market makers and exchange operators such as Citadel Securities and Cboe. The court had already turned down the alliance's earlier request for a temporary restraining order.[4][5][1]
The legal dispute stems from September 18 applications submitted by KalshiEX, Coinbase Derivatives, and Bitnomial Exchange to list perpetual futures on individual equities. The CFTC allowed its 45-day review period to expire on November 2 without objection, which effectively approved the products under agency rules. Following that inaction, Kalshi launched trading on more than 50 U.S. stocks on November 5, prompting the alliance to file suit on November 3 against the agency and Chairman Michael Selig.[5]
The alliance contends that equity perpetuals are security-based swaps under the exclusive oversight of the Securities and Exchange Commission, claiming the CFTC acted arbitrarily and without statutory authority. In response, the six firms argued to the court that equity perpetuals qualify as security futures jointly overseen by both agencies because the statute requires only delivery at some future point rather than on a fixed date. They warned that enjoining the products would force equity perpetuals offshore, pointing out that the SEC lacks a framework for retail trading of exchange-listed security-based swaps and has not acted to halt the exchanges' filings.[3][5]
Key facts
- Coinbase, Kalshi, Payward, DRW Holdings, Jump Trading, and Paradigm sought leave to file an amicus brief supporting the CFTC in the Southern District of New York.
- The amicus brief opposes a motion for a preliminary injunction filed by the Capital Markets Alliance Association in Case No. 1:26-cv-09608.
- The Capital Markets Alliance Association, which includes Cboe and Citadel Securities, sued the CFTC and Chairman Michael Selig on November 3 over product approvals for KalshiEX, Coinbase Derivatives, and Bitnomial Exchange.
- The CFTC allowed its 45-day review period to expire on November 2 without objection, which counted as approval and enabled Kalshi to begin offering perps on over 50 stocks on November 5.
- The trade alliance argues single-stock perps are security-based swaps subject to SEC authority, while the six amici argue they are security futures jointly overseen by the CFTC and SEC.
- The federal court has already denied the alliance's motion for a temporary restraining order.
Sources · 5 sources
- CN
crypto.news@cryptodotnewsPost on X ·
NEW: Coinbase, Kalshi and major trading firms back CFTC oversight of single-stock perpetual futures N: Coinbase, Kalshi and major trading firms back CFTC oversight of single-stock perpetual futureses in the US. https://t.co/eOayipIhz2
Open source - TB
The BlockArticle ·
Coinbase, Kalshi and Payward backs CFTC in lawsuit over single-stock perp futures The crypto firms moved for leave to file an amicus brief defending the CFTC's authority to regulate single-stock perpetual futures in the US.
Open source - LS
Laura Shin@laurashinPost on X ·
The Capital Markets Alliance Association says CFTC-approved single-stock perps are security-based swaps that belong to the SEC. Coinbase and Kalshi told the court they are security futures. https://t.co/GnKLZloiWk
Open source - TB
The Block@TheBlockCoPost on X ·
THE BLOCK: A group of crypto firms — Coinbase, Kalshi, Payward, DRW Holdings, Jump Trading, and Paradigm — asked the court for permission to file an amicus brief defending the CFTC's authority to regulate single-stock perpetual futures in the US. $COIN The brief comes in response to a lawsuit by the Capital Markets Alliance Association (members include Cboe and Citadel Securities) seeking to overturn the CFTC's approval of the products. A decision upholding the approvals would help preserve the path for these firms to offer or expand the products onshore.
Open source - UN
UnchainedArticle ·
Coinbase, Kalshi and Jump Trading Urge Judge to Keep Single-Stock Perps Trading Six crypto and trading firms, led by Coinbase and Kalshi , have asked a federal judge in New York to let perpetual futures on individual U.S. stocks keep trading, siding with the Commodity Futures Trading Commission (CFTC) against a trade group that wants the products pulled. In a friend-of-the-court (amicus) brief filed Nov. 9, Coinbase, Kalshi, Payward (which owns Kraken and Bitnomial), DRW, Jump Trading and Paradigm urged the court to reject the preliminary injunction the Capital Markets Alliance Association is seeking. The court has already turned down the group’s bid for a temporary restraining order, the brief says. Perpetual futures, or perps, are derivatives that never expire; regular funding payments between longs and shorts keep their price near the underlying asset’s. ARK Invest’s Lorenzo Valente saw the stock version coming. “I think you’re gonna have stock PERPs also approved,” Valente said on Unchained in October, adding that “Coinbase, Robinhood, you know, the Backpacks of the world, they’re all gonna compete there.” Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . What the Lawsuit Challenges The alliance, a New York trade group whose members run stock and options exchanges, route customer orders and make markets, sued the CFTC and its chairman, Michael Selig , on Nov. 3. Its target is how the agency handled Sept. 18 applications from KalshiEX, Coinbase Derivatives and Bitnomial Exchange to list perps on single stocks. The CFTC let its 45-day review window lapse on Nov. 2 without objecting, which under its rules counts as approval. Kalshi began offering them on more than 50 U.S. stocks on Nov. 5. Kalshi’s filing alone covered 58 contracts, and Bitnomial’s named 10 stocks, including Alphabet and Microsoft, according to the complaint. The complaint brings two counts under the Administrative Procedure Act (APA), the law that sets the rules federal agencies must follow. The first says the approvals were arbitrary and capricious: the CFTC “abruptly and inexplicably changed positions” on products it had long handled as swaps, and let the filings take effect without a written order. “The CFTC may not avoid the requirements of the APA through silence,” the alliance wrote. The second says the contracts are security-based swaps, which Congress left to the SEC, so the CFTC had no power to approve them at all. Besides undoing the approvals, the group asked the court to declare the contracts security-based swaps and to block them while the case proceeds. Adam Ford, the alliance’s secretary, said in a statement announcing the suit that “the hasty roll out of financial products that circumvent well-established regulatory frameworks erodes investor protection and undermines the integrity and resiliency of the American financial system.” The Firms’ Response The six companies counter that the statute treats security futures, which the CFTC and the SEC oversee jointly, as a separate category from swaps, and that equity perps qualify because the law asks only for delivery at some point in the future, not on a set date. “The one difference is an improvement: equity perpetuals do not expire,” they wrote. Ruling for the alliance, they argued, would “send equity perpetuals back offshore,” since the SEC has no framework for retail trading of exchange-listed security-based swaps. The brief also notes the SEC has not moved to cancel the exchanges’ filings. It isn’t the first court fight over the CFTC’s perps approvals. The Chicago Mercantile Exchange (CME) sued the agency in Washington in June over its approval of Kalshi’s bitcoin perp, which opened the door to U.S.-regulated crypto perps. Related Listen: Why a Single Word Will Decide Who Can Trade Perps in the U.S The post Coinbase, Kalshi and Jump Trading Urge Judge to Keep Single-Stock Perps Trading appeared first on Unchained .
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