Wall Street Firms Sue CFTC Over Perpetual Futures Approvals
Citadel Securities and other financial firms are suing the CFTC to block perpetual futures, arguing the products bypass securities laws and investor protections.
An industry group including Citadel Securities, Cboe Global Markets, and CME Group has filed lawsuits to overturn the Commodity Futures Trading Commission's approval of perpetual futures, known as perps. The legal challenges target both the May approval of crypto perps and the recent authorization of single-stock equity perps, which allowed platforms like Kalshi, Coinbase, and Robinhood to enter the market.
Plaintiffs argue that perps are security-based swaps rather than futures, meaning they should fall under the jurisdiction of the Securities and Exchange Commission. They claim the CFTC's classification creates unfair competition and exposes retail investors to excessive leverage and counterparty risk without necessary safeguards. Additionally, executives warned that the 24/7 nature of perp trading could disrupt U.S. market infrastructure.
In a specific suit to block Kalshi from offering single-stock perps, U.S. District Judge Valerie Caproni noted the claim is likely to succeed on its merits and set an expedited briefing schedule to decide if trading should be halted. Kalshi CEO Tarek Mansour defended the products as the company's most successful launch, characterizing the lawsuits as an attempt by Wall Street to protect its turf. The CFTC maintains that U.S. oversight is necessary to protect investors and asserts that perps possess futures-like features.
