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Coinbase, Kalshi and Kraken parent back CFTC in stock perps suit
Six crypto and trading firms urged a New York judge to keep single-stock perpetual futures trading, siding with the CFTC against a trade group.
Key takeaways
- Industry backing. Six firms with existing or potential equity perp business urged the court to reject the trade group's request for a preliminary injunction.
- Approvals by lapse. The CFTC let its 45-day review window expire on Nov. 2 without objecting, which its rules treat as approval, and Kalshi began listing contracts on Nov. 5.
- Judge's skepticism. Judge Valerie Caproni refused an emergency order but questioned whether contracts with no fixed delivery date fit the security futures definition.
What happened
Coinbase, Kalshi, Payward and three trading firms have asked a federal judge in New York to let perpetual futures on individual U.S. stocks keep trading, backing the Commodity Futures Trading Commission against a trade association that wants the products withdrawn. The six filed a proposed friend-of-the-court brief on Nov. 9 in the U.S. District Court for the Southern District of New York, according to court records described by Unchained and Crypto.news.
The companies are Coinbase, Kalshi, Payward, which owns Kraken and bought Bitnomial earlier this year, along with DRW, Jump Trading and Paradigm. The trading firms described themselves in the filing as market participants with current or possible interests in equity perpetual trading, Crypto.news reported.
The underlying case, Capital Markets Alliance Association v. Commodity Futures Trading Commission, No. 1:26-cv-09608-LGS, targets how the regulator handled listing applications that Coinbase Derivatives, KalshiEX and Bitnomial Exchange submitted on Sept. 18. The agency's 45-day review period lapsed on Nov. 2 without objection, which under its rules amounts to approval. Kalshi started offering contracts tied to more than 50 U.S. stocks on Nov. 5, and its filing alone covered 58 contracts while Bitnomial's listed 10 stocks, including Alphabet and Microsoft, per the complaint.
The alliance, a New York group whose members run exchanges and route or make markets in stocks and options, brought two claims under the Administrative Procedure Act. It contends the approvals were arbitrary and capricious because the agency shifted position on products it had treated as swaps and let the filings take effect without a written order, and it argues the contracts are security-based swaps that Congress assigned to the Securities and Exchange Commission, leaving the CFTC without authority to clear them. It wants the approvals vacated and trading blocked while the case proceeds.
On Nov. 3, U.S. District Judge Valerie Caproni declined to issue a temporary restraining order, finding the alliance had not shown harm urgent enough for emergency intervention, but her preliminary reading leaned toward the plaintiff's view of the statute: she questioned whether perpetual contracts meet the definition of security futures given that they provide for no delivery on a specified future date.
Why it matters
The dispute decides whether retail traders in the U.S. can access perpetual derivatives on single stocks through regulated venues rather than offshore platforms. The six firms argued that a ruling for the alliance would push equity perpetuals abroad, noting that the SEC has no framework for retail trading of exchange-listed security-based swaps. They also pointed out that the SEC has not moved to cancel the exchanges' filings.
The case also tests how far the CFTC's product review can run on silence. The alliance argues the agency cannot sidestep administrative-law requirements by letting a deadline pass without a written decision, a point that could shape how quickly novel derivatives reach U.S. markets in future.
What the data shows
The numbers in the record: three exchange applications submitted Sept. 18; a 45-day review window that expired Nov. 2, deemed approval; the first listings on Nov. 5 across more than 50 stocks; 58 contracts in Kalshi's filing alone; and 10 stocks named in Bitnomial's, including Alphabet and Microsoft. The CFTC's opposition was due Nov. 6 and the alliance's response was set for Nov. 10, subject to change by the assigned judge.
Background
The six firms contend that the Commodity Exchange Act places security futures in a category overseen jointly by the CFTC and the SEC, separate from swaps, and that equity perpetuals fit because the law asks only for delivery at some point in the future rather than a set date. Coinbase general counsel Molly Abraham defended the filing on Nov. 10, pointing to a framework Congress set up in legislation enacted in 2000, according to Crypto.news. Coinbase Vice Chairman Ryan VanGrack has argued that the U.S. should lead rather than cede the market.
The alliance's secretary, Adam Ford, said when the suit was announced that rushing out products that sidestep established regulatory structures weakens investor protection and the resilience of the financial system. It is not the first court challenge to the agency's perp approvals: CME sued the CFTC in Washington in June over its clearance of Kalshi's bitcoin perpetual, a decision that opened the door to U.S.-regulated crypto perps.
What is still unclear
The two accounts differ slightly on when the alliance filed, with one placing the suit on Nov. 2 and the other on Nov. 3. It is also unsettled how Caproni will rule on the preliminary injunction request, since her emergency denial turned on timing and harm rather than the merits. Whether the SEC will take any position on the contracts remains open; the agency declined to comment during earlier reporting while saying it supports products operating under appropriate oversight.
What to watch
Watch the judge's ruling on the preliminary injunction and whether she accepts the alliance's reading of the security futures definition. Also watch for any SEC action on the exchange filings, and for further litigation over CFTC-approved perpetual products beyond this case.
Questions readers ask
What are single-stock perpetual futures?
They are derivatives tied to an individual company's shares that never expire. Regular funding payments between long and short positions keep their price close to the underlying stock, and traders can close positions without waiting for a contract to mature.
Why does the CFTC say it can approve them?
The agency and its supporters argue the contracts fall under the security futures framework, which the CFTC and SEC oversee jointly, because the law requires delivery at some future point rather than a fixed date.
Who is suing the CFTC?
The Capital Markets Alliance Association, a New York trade group whose members include Cboe and Citadel Securities and whose members run exchanges, route orders and make markets.
