CME Sues CFTC Over Kalshi's Perps: One Exchange's "Swap" Is Another's Futures Fight ⚖️

The Chicago Mercantile Exchange Group filed a federal lawsuit against the U.S. Commodity Futures Trading Commission on Thursday, June 18, challenging the regulator's approval of crypto perpetual futures for prediction-market platform Kalshi. CME, the world's largest futures exchange operator, filed the complaint in the U.S. District Court for the District of Columbia against the CFTC and its chair, Michael Selig, over what it described as the agency's improper authorization of perpetual futures tied to the spot price of Bitcoin ($BTC). The case stems from a May 29 notice in which the CFTC greenlighted $BTC perpetual contracts for Kalshi and issued a no-action position for similar products on cryptocurrency exchange Coinbase.

In announcing the suit on CNBC's "Fast Money" on Wednesday, CME CEO Terrence Duffy argued that the products are legally swaps under the Dodd-Frank Act, not futures, because they involve two parties exchanging funding payments and lack a defined expiration date. "Under the Dodd-Frank Act, it clearly defines what a swap is and what a future is, and when there's two parties exchanging payments to each other, that's deemed a swap," Duffy said. He also pointed to CME's exclusive licensing agreements with every major benchmark provider whose indexes underpin crypto derivatives pricing, contending that any platform offering such products would need to route them through CME's framework if they are reclassified as swaps. "We have an exclusive license with every single provider of the benchmarks. So all of these would have to go through CME regardless of the perpetual. They would have to list them as swaps if that's the way that it came out," he said.

CME's complaint alleged that the CFTC's approval of these products, which did not undergo a formal rulemaking process, was inconsistent with congressional directives and that Selig had acted unilaterally. "With one stroke of his pen, [Selig] overrode Congress's definition of the term 'swap' and circumvented the regulatory regime Congress required for that form of derivative," the complaint stated, adding that the "CFTC's failure to evenhandedly, consistently, and correctly apply the CEA risks harming competition and destabilizing derivatives markets." Selig, confirmed by the U.S. Senate in December 2025, currently serves as chair and sole commissioner of a leadership panel intended to consist of a bipartisan group of five people. As of Thursday, U.S. President Donald Trump had not announced any nominations to fill the remaining seats.

CFTC Chair Michael Selig defended the approval earlier in the week, telling CNBC it was "time to approve regulated futures contracts that have no expiration date" and describing the Commodity Exchange Act as one that "does not define the term 'futures contract.'" A CFTC spokesperson characterized CME's challenge as "lawfare" against the agency and the administration's crypto policies, calling the complaint "frivolous." Kalshi has since expanded its offerings to include perpetual futures tied to Ethereum ($ETH), XRP, and Hyperliquid's HYPE token. The lawsuit comes as the U.S. Senate debates the CLARITY Act, which would formalize CFTC authority over digital commodity derivatives, and follows the CFTC's separate signal that it plans to block CME's rollout of 24/7 trading for gold and oil futures contracts on grounds that the plan would "worsen" oil price volatility.