What to know:
- CFTC perpetual futures face legal pressure after Hyperliquid criticized CME’s lawsuit.
- Hyperliquid said CME’s case could protect its 92% share in U.S. derivatives markets.
- CME argues Bitcoin perpetual futures should be treated as swaps under Dodd-Frank.
CFTC perpetual futures entered a fresh legal fight after Hyperliquid criticized CME Group’s lawsuit against the U.S. commodities regulator. The exchange said the case could slow regulated crypto derivatives and protect CME’s lead in U.S. markets for traded derivatives products.
The statement comes via Hyperliquid Policy Center on X. It claimed that American traders have been trading perpetual futures using offshore venues for a long time. The firm said that legal access in the U.S. was not available until the CFTC opened a compliant route.
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CME Lawsuit Sparks Market Competition Concerns
The company said CME’s case is not just about the way contracts are designed. It framed the lawsuit as a competition matter in the U.S. derivatives market. Hyperliquid referenced Better Markets data that indicated CME accounts for approximately 92% of the U.S. exchange-traded derivatives activity.
Hyperliquid stated that perpetual futures offered by CFTC may introduce a significant cryptocurrency trading product to the regulated domestic markets. It urged more exchanges to provide such contracts under guidelines. The firm believes that access restrictions would better maintain the position of offshore platforms.
The statement came after comments by CME Group CEO Terry Duffy. During a June 17 interview with CNBC, Duffy stated that CME would file a lawsuit against the CFTC for approving the Bitcoin perpetual futures. He said the contracts should be regarded as swaps under the Dodd-Frank Act.
Duffy said the classification issue forms the basis of CME’s legal challenge. Additionally, he said CME has exclusive licensing arrangements with benchmark providers. According to him, rival products may still need to work through CME if regulators allow them to operate.
The CME head said the exchange has been working on the case for approximately eight months. He added that CME’s board was involved before the decision was made. The lawsuit now questions CFTC’s approach to crypto-linked products that have no expiration dates under futures law.
Selig Defends CFTC Perpetual Futures Approval
In a post on X, CFTC Chair Mike Selig pushed back against the approval, saying it was being made within the agency’s legal framework. He said U.S. law does not require futures contracts to include an expiration date. Selig stated that CFTC perpetual futures are contractually compliant with the Commodity Exchange Act and prevailing legal views.
Selig also denied allegations that regulated perpetual contracts would enable extreme leverage. Approved products will be subject to the same margin and leverage requirements as other U.S. futures products. His response addressed concerns about possible 250x trading.
The chair said the agency had reviewed industry feedback before approving the products. He cited the CFTC’s Request for Comment (RFC) from 2025 that resulted in over a hundred submissions. He also stated that funding rates help maintain the alignment of the perpetual futures price to the spot markets.
The conflict started when the CFTC granted Kalshi permission to launch Bitcoin perpetual futures in late May. CFTC perpetual futures allow traders to speculate on prices without the traditional expiry time. The products have been adopted across the globe in the crypto derivatives markets.
Offshore exchanges have been a traditional source for such contracts for U.S. traders. Part of that activity may be moved to regulated venues with the CFTC perpetual futures decision. CME’s lawsuit may now decide how quickly those products expand in the United States.
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